Legal practitioners may find themselves in situations where clients insist that an unsustainable case be advanced. Taking on matters where clients seek to litigate on principle, prove a point to their opponents or delay an inevitable outcome is particularly risky. Whether acting for the party/parties initiating the litigation or those against whom the legal proceedings are brought, legal practitioners must be aware of the potential risks involved and not pander to the whims of their clients.

This subject was considered in an article by Constitutional Court Justice Owen Rogers entitled ‘The ethics of the hopeless case’ (2017) 30.3 Advocate 46. Though the regulatory framework for legal practitioners in South Africa has significantly changed with the Legal Practice Act 28 of 2014 (the Act) and the Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities (Code of Conduct), respectively, having come into effect, the lessons from that article are still applicable. The professional ethical considerations and other hazards remain, and some practitioners (and their clients) seem oblivious to those, as can be gleaned from the recent cases discussed below.

The Code of Conduct

The Code of Conduct prescribes that the integrity in the performance of professional services will include that:

‘9.9. A legal practitioner shall, in giving any advice about the prospects of success in any matter, give a true account of his or her opinion and shall not pander to a client’s whims or desires. However, in any matter in which the legal practitioner’s opinion is adverse to the prospects of success, the legal practitioner may upon client’s insistence place before a court the client’s case for the adjudicating officer to decide the matter and the legal practitioner shall advance that case as best as circumstances allow.’

The Code of Conduct also prescribes the need for members of the legal profession to:

‘3.3. treat the interests of their clients as paramount, provided that their conduct shall be subject always to –

3.3.1. their duty to the court;

3.3.2. the interests of justice;

3.3.3. observance of the law; and

3.3.4. the maintenance of the ethical standards prescribed by this code, and any ethical standards generally recognised by the profession.’

In the first three cases referred to below, the defendants did not meaningfully participate in litigation they purportedly intended defending.

In Muir v Road Accident Fund (GJ) (unreported case no 28025/2019, 18-3-2024) (Makhambeni AJ), though facing a personal injury claim arising from a motor vehicle collision, the defendant did not call any witnesses or commission expert reports to challenge those of the plaintiff. Displeased with the way the defendant’s legal representative conducted himself during the trial, the court ordered that a copy of the judgment be served on the Legal Practice Council (LPC). Judgment was granted in the plaintiff’s favour and the defendant ordered to pay the plaintiff’s costs.

In Gwebu v Road Accident Fund (MM) (unreported case no 2465/2019, 11-4-2024) (Mashile J) the parties had agreed on the issues regarding liability, general damages, and the plaintiff’s needs for future medical treatment. The only matter before the court was the plaintiff’s future loss of earnings. The plaintiff had commissioned reports by the relevant experts who were called to testify in support of his case and the plaintiff himself took the stand. Mashile J noted that:

‘[3] Notwithstanding that the defendant was represented by the State Attorney during the hearing, the matter was effectively not defended. There were no opposing papers, the reports of the plaintiff’s experts were admitted into evidence without any contestation from the defendant and there was no meaningful cross-examination of the plaintiff’s witnesses. Moreover, the defendant did not lead any witnesses in opposition. That said and with regard to past medical expenses, the defendant pleaded with the court to hold back on its decision until the Supreme Court of Appeal pronounces on the issue whether the defendant is under any obligation to compensate plaintiffs for such damages in circumstances where medical aid has settled them.’ Judgment was granted in the plaintiff’s favour in this case.

In Van Den Hever and Another v South African National Road Agency Limited and Another (NCK) (unreported case no 19/2023, 8-3-2024) (Phatshoane AJP), the respondent filed a notice of intention to oppose the application brought against it but did not file an answering affidavit to explain the delay in carrying out its contractual obligations or why it should not be held liable for the costs of the application. It is thus unsurprising that the respondent was ordered to pay the applicants’ costs even though the respondent had remedied cause of the applicants’ complaint by the time the judgment was handed down.

In Nkosi and Another v Minister of Police and Others (GJ) (unreported case no 164072/022, 28-3-2024) (Van Niekerk AJ) it was argued on behalf of the defendants that:

‘[47] … a punitive order for costs should be granted, based on the submission that plaintiffs presented a hopelessly fabricated and baseless case, based on evidence replete with contradictions and improbabilities, aimed at misleading the court. [In] support of this argument it was submitted that the case docket, containing the statements of both witnesses called on behalf of the defendants, were in the possession of plaintiffs’ legal representatives four weeks before the trial as a result of which the inference to be drawn is namely that defendants’ version was known to plaintiffs and their legal representatives at that time. Notwithstanding, [the] plaintiffs ignored defendants version and presented their case without any attempt to deal with the defendants’ version … [and the] plaintiffs’ legal representatives failed in their fiduciary duty to this court and advanced a hopeless case by persisting with the claim for malicious prosecution in circumstances where no evidence whatsoever was presented on behalf of Plaintiffs to support that claim.

[48] … The manner in which the trial was conducted leaves an impression that the institution of the action was opportunistic, resulting in a substantial waste of resources in terms of court time, public funds, and the police members having to spend time in the witness box instead of doing their duties’ (footnotes omitted).

A punitive costs order was thus made against the plaintiffs.

In Nathram v Road Accident Fund (GP) (unreported case no 44876/2020, 26-4-2024) (Davis J) a notice of intention to defend filed more than three years after the expiry of the dies was found to constitute an abuse of the court process in the context of RAF litigation and set aside. No defence or actual intention to go on trial had been disclosed by the RAF.

Pursuing a hopeless case in order to generate fees is an equally risky practice. In University of South Africa v Socikwa and Others and a related matter [2023] 8 BLLR 836 (LC); (2023) 44 ILJ 1785 (LC) the court precluded the legal representatives from charging fees in a case it described as hopeless.

Paragraph 3.10 of the Code of Conduct obliges those in the profession to ‘advise their clients at the earliest possible opportunity on the likely success of such clients’ cases and not generate unnecessary work, nor involve their clients in unnecessary expense.’

Risk management suggestions

Legal practitioners must make their clients aware of the risks of pursuing whimsical or hopeless cases. This advice must be recorded so that it can be used in defence of the practitioner concerned should he or she later either face a complaint to the LPC or a claim by the client for a refund of fees paid or disbursements incurred. If a claim for a refund of fees follows the pursuit of a hopeless case, the Legal Practitioners Indemnity Insurance Fund NPC (LPIIF) policy will not indemnify the claim as it will be regarded as a trading debt (see clause 16(a)). Trading debts are defined in clause XXIX the LPIIF policy as:

‘A debt incurred as a result of the undertaking of the Insured’s business or trade (trading debts are not compensatory in nature, and this policy deals only with claims for Compensation). This exclusion includes (but is not limited to) the following:

1. a) a refund of any fee or disbursement charged by the Insured to a client;
2. b) Compensation or other forms of damages which are calculated by reference to any fee or disbursement charged by the Insured to a client or incurred by the Insured;
3. c) payment of costs relating to a dispute about fees or disbursements charged by the Insured to a client; and/or
4. d) any labour dispute or act of an administrative nature in the Insured’s practice’ (emphasis in the original text has been removed).

The LPIIF policy can be accessed on the website www.lpiif.co.za. Claims arising from legal services conducted in violation of the Act are similarly excluded (clause 16(u)) and so are punitive costs orders or exemplary damages (clause 16(g)). Many top-up insurance policies contain similar trading debt and punitive cost order exclusions. Practitioners pandering to their clients’ whims and pursuing hopeless cases thus do so at their peril and risk –

• complaints against them being made to the LPC; and
• having to face the consequences thereof without indemnity from their professional indemnity insurers.

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 2024 (June) DR 9.