Zelda Venter
THE Pretoria High Court has put a stop to lawyers taking more than their 25 percent share of the payout when acting on a contingency basis, a decision which personal injury lawyers say they will appeal against.
Yesterday a full Bench of three judges confirmed any contingency fee agreements which did not comply with the Contingency Fees Act, would be invalid.
In terms of the act, when there is a “no win, no fee” agreement and the claim is successful, the lawyer is only entitled to legal fees up to 25 percent of the total awarded.
This was the decision in two related judgments by Pretoria Judge President Dunstan Mlambo and judges Hans Fabricius and Fayeeza Kathree-Setiloane.
In the first judgment they ordered top Joburg personal injury lawyer Ronald Bobroff to return some of the fees charged to a Road Accident Fund (RAF) client after finding his agreement was invalid and the fees far exceeded the regulations of the act.
The RAF paid out R2 793 158 in respect of accident victim Juanne de la Guerre’s claim, but she only received R1 729 451. The total deducted by Bobroff, former chairman of the Law Society of the Northern Provinces, amounted to R1 063 707.
Bobroff was ordered to give her a fully itemised bill, supported by the necessary vouchers for reasonable fees incurred by him when he handled her case. She is also entitled to demand this bill to be subjected to tax by the tax master at the High Court who will scrutinise the bill to see whether it is fair.
Bobroff has to pay her the difference between what he charged and the total of the taxed bill.
The court also made a punitive costs order against him for the legal costs incurred by De la Guerre.
Judge Fabricius said it was “blatantly obvious” that the agreement did not comply with the act and that Bobroff, as an experienced practitioner, must have been aware the Supreme Court of Appeal and other authorities had made it clear any agreement not complying with the act would be invalid and could amount to unprofessional conduct.
An advocate, who cannot be named for professional reasons, said this judgment could open the floodgates for other people who felt they had been overcharged by their lawyers. They could approach the court on the same basis De la Guerre did as hers was a test case.
The advocate said he had four cases waiting to go to court following this judgment.
Meanwhile the South African Association of Personal Injury Lawyers, of which Bobroff is the founder member, was blasted in a second judgment.
Unconstitutional
In this case the association asked that the act be declared unconstitutional. This was turned down. Bobroff indicated that both judgments would be appealed in the Constitutional Court.
It was argued in the second case that legal practitioners should be able to conclude contingency fee agreements with clients without complying with the requirements of the act which they claimed discriminated against lawyers and their clients.
However, Judge Kathree-Setiloane said: “If the association’s contentions are upheld, a significant portion of funds earmarked for RAF victims would be claimed by their legal representatives…”
She added that the act sought to strike a balance between the vices of contingency fee agreements on the one hand and making justice available to the poor who otherwise would not have access to it.
She added that invariably the percentage at which attorneys undertook to work on contingency exceeded 25 percent. Thus, the safeguards in place under the act were to protect the public from being abused.
The judge commented that the Law Society of the Northern Provinces and its Free State counterpart in 2002 made a ruling permitting its members to conclude contingency fee agreements outside the prescripts of the act, provided certain criteria were met.
Lashing out at the Northern Provinces Society, she said no rules had been put in place to address the risks of overcharging by its members.
The president of the Law Society of the Northern Provinces, Busani Mabunda said they were still studying the judgment. The purpose of the application was to obtain certainty about contingency fees.
