LSSA submissions on legal fees

July 1st, 2021
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One of the functions of the Law Society of South Africa (LSSA), in fulfilling its mandate of representing the attorneys’ profession, is to comment on legislation and policy documents that affect public interest and the legal profession. In February 2019, the LSSA held a meeting to discuss the International Conference on Access to Justice, Legal Costs and Other Interventions, which was hosted by the South African Law Reform Commission (SALRC) in 2018. The aim of the meeting was to tackle issues connected with legal costs, particularly in view of s 35 of the Legal Practice Act 28 of 2014 (LPA) (see ‘Show me the money: A discussion on access to justice v legal fees’ 2019 (March) DR 3).

The LSSA wrote to the Minister of Justice requesting the suspension of subss 35(1), (2), (3) and (7) up to and including (12), which deals with fees for legal services, until the SALRC has completed its investigation on legal fees and there has been proper consultation. This means that only subss (4), (5) and (6) of s 35 have come into operation.

On 16 March 2019, the SALRC released Issue Paper 36: Investigation into Legal Fees (Project 142), which details the organisation’s study on –

  • the factors and circumstances that give rise to legal fees that are unattainable for most people;
  • the desirability of establishing a mechanism responsible for determining legal fees and tariffs;
  • litigious and non-litigious matters;
  • attorney-and-client costs and contractual freedom;
  • contingency fee agreements; and
  • legislative and other interventions to improve access to justice by members of the public (see ‘Have your say on legal costs’ 2019 (June) DR 3).

In May 2021, the LSSA considered Discussion Paper 150: Investigation into Legal Fees, including access to justice and other interventions (Project 142) published by the SALRC for comment. Following extensive consultation via the LSSA’s various professional affairs committees, its constituent members (being the Black Lawyers Association, the National Association of Democratic Lawyers and provincial Attorneys’ Associations) and members of the legal profession, and thorough consideration of the SALRC and other stakeholders’ comments, the LSSA submitted its comments.

In the introduction of the submitted comments, the LSSA noted: ‘The LSSA is well aware of the need for greater access to justice by members of the public and that legal services are allegedly unaffordable. However, we believe that access to justice can be achieved through less invasive means than implementing a tariff (with or without limited targeting) in respect of attorney-and-client fees. We have no problem with the Legal Practice Council (LPC) issuing guidelines (Option 3, discussed in Chapter 7). In terms of section 35(5)(c) of the Legal Practice Act (LPA), the Commission must take into consideration the interests of the legal profession when undertaking its investigation. There is a conspicuous absence of practicing attorneys on the Commission’s Advisory Committee. We believe that, without an acute understanding of the realities of and expenditure associated with operating a law practice, the interests of the legal profession, and in particular small legal firms, could not have been sufficiently dealt with by the Commission. There appears to be little research into a complex legal system, the requirements of legal practitioners and firms, the difficulties experienced by candidate legal practitioners, the costs of equipment, copies, research tools, costs of office rental, etc.  Further, while a great deal of attention has been given to the cost of legal services, insufficient attention has been given to identifying the actual economic root cause of the cost of legal services. The allegation that legal services are regarded as unaffordable compels the state to seek ways to reduce these costs, but imposing fee limitations on legal practitioners is not the way to go in solving what is quite evidently a market efficiency problem, not an abuse of dominance problem.’

Considering the practice of attorneys, in its submission, the LSSA added that: ‘Coupled to that, are the increased professional expenses of legal practitioners (subscription fees, professional indemnity insurance cover, professional interest membership fees, continuous professional development, top-up insurance and auditors’ fees). It takes many years of study and apprenticeship to enter the legal professional, because law is a large and complex field of study and the consequences of providing a poor legal service to a client can be devastating for the client on the receiving end of the poor service. Very little work remains reserved for attorneys. Many tax practitioners and other law firms are opening private companies that do not fall under the regulatory control of the LPC. The legal profession is already highly regulated and if it is over-regulated, it will eventually lose more practitioners to that sector. For the most part the same kind of work can be done without the risk. The recommendations of the Commission, if implemented, will have serious and far-reaching consequences for the legal profession and the public and we believe that, particularly recommendations 5.1, 5.4, 6.11 to 6.13 and 6.15, will lead to job losses within the profession, and this will result in a major loss of professional skills needed to assist members of the public.’

To read the full submission by the LSSA visit www.LSSA.org.za.

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This article was first published in De Rebus in 2021 (July) DR 3.

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