About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Mpumalanga High Court, Mbombela
SAFLII
>>
Databases
>>
South Africa: Mpumalanga High Court, Mbombela
>>
2022
>>
[2022] ZAMPMBHC 32
|
|
Mucavele v Health MEC Mpumalanga (3352/2016) [2022] ZAMPMBHC 32; 2023 (3) SA 173 (MM) (17 March 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION (MAIN SEAT)
CASE
NUMBER 3352/2016
Reportable:
YES
Of
interest to other Judges: YES
17
March 2022
THOBILE
KHETHIWE MUCAVELE
PLAINTIFF
Obo
MPHO SIBONISO MUCAVELE
And
THE
MEC FOR HEALTH, MPUMALANGA
DEFENDANT
(Registration
number: 2013/214353/07)
JUDGMENT
LEGODI
JP
[1]
According to
Merriam-Webster Dictionary,
a contingency fee
agreement means a fee for services as of a lawyer paid upon
successful completion of the services and usually
calculated as a
percentage of the gain realised for the client. It implies generally
that only if a claim is successful will a
fee be payable, possibly on
a higher rate than normal and from the capital amount recovered in
such claim.
[2]
Before me, the question is whether the plaintiff in this matter
entered into a contingency
fees agreement with the attorney, Mr
Johann Wilhelm Joubert or Mr Louw of Attorneys VZLR Inc practicing at
Monument Park, 71 Steenbok
Avenue, Pretoria, and if so, whether the
agreement in question is illegal under common law for non-compliance
with the provisions
of the Contingency Fee Agreement Act No. 66 of
1997 (hereinafter referred to as the Act). The question was prompted
by an enquiry
made by this court on 19 January 2022 which enquiry was
preceded by an allegation in an affidavit deposed to by Mr Louw on 16
November
2021 in which he stated that ‘
neither the plaintiff
nor plaintiff’s legal representatives entered into a
contingency fee agreement as is contemplated in
terms of
section 4(1)
of the
Contingency Fees Act No. 66 of 1997
with another’
.
[3]
Initially, I thought the affidavit deposed to on 16 November 2021 by
Mr Louw, was
prompted by paragraph 15.11.4 of the Practice Directive
dated 9 January 2020 as amended which provides that in selected
damages
claim matters, like RAF and medical negligence matters, if a
bill of costs is submitted where a settlement has been reached, and
is suggested that no contingency fee agreement has been concluded
with the client in whose favour a settlement has been reached,
the
party or party’s attorney filing such a bill of costs, shall
also file an affidavit confirming that no contingency fee
agreement
has been concluded with the client. Unfortunately, the attorneys seem
to have seized an opportunity to twist and manipulate
this provision
which was meant to be resorted to when a bill of costs is submitted
to the taxing master. Further provision in the
directive will have to
be added to ensure that this abuse and chance taking to avoid
complying with
section 4
of the
Contingency Fees Act, is
brought to
an end.
[4]
Upon receipt of the affidavit aforesaid and the draft order intended
to be made an
order of court as so agreed between the parties, more
information was requested as follows:
“
The
statement appears to pre-suppose that the plaintiff and his or her
attorney agreed on a specific amount of a fee for the litigation
when
the instructions were taken and that the agreed fee was so paid by
the plaintiff. For this, the plaintiff’s attorney
is hereby
directed as follows
:
1.
If it is
correct that the plaintiff and his attorney agreed on a fee as so
required and it was so paid, the following information
should be
provided in an affidavit by the plaintiff and his attorney
by
not later than 12h00 on Monday the 24 January 2022.
1.1
When was such a
fee agreed upon?
1.2
When was such a
fee paid in total?
1.3
What is the
amount of the fee agreed upon?
1.4
If no fee was
paid or was paid in part, when was such a fee or remaining part
thereof supposed to be paid?
1.5
If no fee was
paid, what is the basis upon which is alleged no contingency fee
agreement was concluded?”
[5]
“The statement appears to pre-suppose” in the quotation
above, is with
reference to what was said by Mr Louw in his affidavit
as quoted in paragraph [2] of this judgment. I will later turn to
deal with
the responses to the questions raised as quoted in the
preceding paragraph. But, before that, i deal first with the
background
of what Mr Joubert articulates in paragraphs 5 and 6 of
his affidavit in which is stated as follows:
“
5.1
After receipt of the instruction and upon considering all the
documentation and initial
reports relating to this particular claim,
I concluded that the Plaintiff had a prosecutable claim, although of
course by no means
without risk.
5.2
All practitioners of this field of the law are required to make such
an assessment.
6.1 I therefore
entered into an agreement with the plaintiff on the basis that I
would accept the mandate to act on behalf
of her child, represented
by the Plaintiff
and that I would only, at the finalisation of the
matter, recover my reasonable attorney and own client fees as well as
all disbursements
not recovered in the party and party bill of costs.
6.2 This is standard
practice and in my view
fairer to the client than entering into
contingency fee agreement, for the obvious reason that although the
client carries the
risk of having to pay my fees and
disbursements, that payment obligation is held over until
finalisation and there is no success
fee involved”
. (My
emphasis).
[6]
Starting with the latter statement, I am at a loss how such an
agreement can be ‘
fairer than entering into a contingency
fee agreement’
when in actual fact client would then run
the risk of paying out of her own pocket hundred thousands of
thousands or millions of
rand in the event the case is not successful
and assuming that it was reasonably expected by Mr Joubert or Mr Louw
that the plaintiff
was capable of paying any such of his “
reasonable
attorney and own client fees as well as all disbursements not
recovered in the party and party bill of costs”,
should the
plaintiff not have been successful in the litigation
.
As it
would appear later herein, it is common cause that the plaintiff is
indigent who is apparently relying on other people including
her
attorneys for subsistence. The suggestion that “
no success
fee” or “no win or no fees”
agreement was
involved
,
is not convincing as it would appear later in this
judgment. But, if the provisions of the Act were heeded to and the
case was lost,
the client did not have to worry as that would have
been the risk the attorney was prepared to take. Indeed, that is the
risk Mr
Joubert or Louw took and this appears to be common cause. But
for falling for what Mr Joubert asserts in his affidavit, the client
runs the potential risk of being hit with inflated fees which did not
conform to the provisions of the Act and the relevant provisions
of
the Legal Practice Act. That is what the two Acts are intended to
curb by allowing the court to have an oversight authority
on matters
where contingency fee agreement was concluded. Before an order is
made, the court in such cases has to be satisfied
that the relevant
provisions of the Act have been complied with. The Act is actually
meant to protect the poor, the vulnerable
and the uneducated
litigants like the plaintiff in this case who is said to be indigent
and living in one room RDP house at Matsulu-
Mpumalanga.
[7]
It is worrying that an agreement relied upon is in the form of
consultation notes
taken down on 1 September 2016, although Mr
Mullins SC sought to downplay the salient features in the affidavit
of 24 January 2022
in particular paragraph 9 thereof. The notes are
in Afrikaans and to paraphrase, they allude to this: It was on 1
September 2016
when the consultation took place. Present, was the
attorney, the plaintiff and the child. The attorney explained to the
plaintiff
that the records and I want to assume referring to hospital
records, have been sent to various experts. The report of the
radiologist
was received. The report confirmed the injuries. It was
then explained to the client that it was a good case. The attorney
then
explained the process to client and that it might take long time
about seven years to finalise the matter. Furthermore, client was
informed that an advocate would be briefed. Client indicated that she
understood. Client then asked for money and the attorney
responded by
saying he will make a plan or will see what he could do.
[8]
Then, is concluded in the consultation notes document as follows and
this is my own
translation from Afrikaans to English:
“
I explained
fees and that at the end, a statement of account will be issued. I do
not know how much it would be but I should first
see how much; work
(hours) I am going to make. She understands. Explained the role of an
advocate and that she will be informed
as soon as counsel shall have
been briefed. She must just hang on there
”.
[9]
I deal later with this statement in its context when I deal with the
responses contained
in Mr Joubert affidavits filed as so directed. It
suffices for now to mention that when a contingency fee agreement is
not applicable,
client should be told upfront what the litigation is
likely to cause and an attorney is not expected to take and execute
instructions
where there is no cover unless the instruction is
accepted on the basis of contingency fee agreement. In the present
case for example,
having assessed the merits of the case and found
that there was a good case, an hourly rate or estimation of fees
should have been
provided. In addition, the estimate fee of the
advocate should have been provided there and then or once counsel is
briefed and
fees or estimate thereof the attorney agreed with the
advocate should have been conveyed to client.
[10]
Paragraph 32 of the code of conduct for legal practitioners dealing
with prohibited fees agreement
provides as follows:
“
32.1 Counsel
shall not agree to charge on results or agree to reduce or waive fees
if a positive result is not achieved, except
in a matters taken on
contingency in terms of the
Contingency Fees Act 66 of 1997
and or
save as contemplated in section 92 of the Act.
32.2 Counsel shall not
agree to charge a fee as allowed on taxation except in a matter
undertaken on contingency, or as permitted
in terms section 92 of the
Act”.
[11]
There is another mystery around the consultation notes document of 1
September 2016. In the affidavit
deposed to by Mr Louw on 16 November
2021 it was him who came with the no contingency fee agreement has
been concluded statement.
He asserted that the facts in his affidavit
were within his personal knowledge save where the context indicated
to the contrary
or where he expressly stated otherwise and were to
the best of his knowledge and belief both to be true and correct.
Then in paragraph
1.4 of his affidavit he confirmed that no
contingency fee agreement was concluded. He said nothing about the
consultation notes
document. But all what we now know from the
consultation notes document, only one attorney was present when the
document was contemporaneously
produced during consultation. Who was
the attorney involved on 1 September 2016? This is the mystery I am
talking about. It is
not explained in the affidavits filed by Mr
Joubert. When Mr Mullins was engaged on the issue, it did not appear
he was aware of
Mr Louw’s affidavit.
[12]
I now find it necessary to deal with the background that led to the
Act. I do this before I deal
with the responses to questions posed to
the parties as quoted in paragraph [4] of this judgment. On 23 April
1999, the Act came
into operation. This was preceded by the South
African Law Commission having investigated and reported on their
findings in 1996
on the question of contingency fees. The Commission
recommended that contingency fee agreements should be legalised in
South African
law and that common law prohibitions on such fees
should be removed. The Act was introduced following the English law
which permitted
contingency fee arrangements on ‘no win, no
fees’ and thus with increased fees in case of success, but of
course subject
to some restrictions as it would appear later
hereunder.
[13]
As stated above, the Act was promulgated after the South African Law
Commission was requested
to investigate the desirability of a system
of contingency fees. The Commission published a working paper for
public comment in
March 1996. Resultantly, the report was approved by
the Commission and was submitted to the Minister responsible on 6
December
1996. The crux of the recommendation by the Commission was
that contingency fee agreements were to be legalised in South African
law and that common law prohibiting such fees ought to be removed.
For this, the Commission came to the conclusion that a system
of
contingency fee in terms of which a prospective litigant would only
be liable to remunerate their legal representative in the
event of a
successful litigation, should be allowed. This so the Commission
found, could contribute to promote access to courts
and that such a
system was desirable.
[14]
I find the following statement by the Law Commission to fit the facts
of the present case regarding
what was intended in the proposed
legislation which ultimately became the Act under consideration. The
statement reads: “
should the client win the case, the fee
payable to the legal practitioner in terms of the contingency fee
agreement may be recovered
from the proceeds of the litigation and is
usually higher than the practitioner’s normal fee”.
[15]
The Act is very short and precise. In 2004 the Supreme Court of
Appeal in the matter of
Price Waterhouse Coopers Inc and Others V
National Potato Co-operative Ltd
2004 (6) SA 66
(SCA) at para [41]
held as follows:
“
[41]
The
Contingency Fees Act 66 of 1997 (which came into operation on 23
April 1999), provides for two forms of contingency fee agreements
which attorneys and advocates may enter into with their clients. The
first, is a ‘no win, no fees’ agreement (s 2(1)(a))
and
the second is an agreement in terms of which the legal practitioner
is entitled to fees higher than the normal fee if the client
is
successful (s 2(1)(b)). The second type of agreement is subject to
limitations. Higher fees may not exceed the normal fees of
the legal
practitioner by more than 100 per cent and in the case of claims
sounding in money this fee may not exceed 25 per cent
of the total
amount awarded or any amount obtained by the client in consequence of
the proceedings, excluding costs (s 2(2)). The
Act has detailed
requirements for the agreement (s 3), the procedure to be followed
when a matter is settled (s 4) and gives the
client a right of review
(s 5). The professional controlling bodies may make rules which
they deem necessary to give effect
to the Act (s 6) and the Minister
of Justice may make regulations for implementing and monitoring the
provisions of the Act (s
7). The clear intention
is
that contingency fees be carefully controlled
.
The
Act was enacted to
legitimise
contingency fee agreements between legal practitioners and their
clients which would otherwise be prohibited by the common
law. Any
contingency fee agreement between such parties which is not covered
by the Act, is therefore illegal
.
What is of significance, however, is that by permitting ‘no
win, no fees’ agreements the legislature has made speculative
litigation possible. And by permitting increased fee agreements the
legislature has made it possible for legal practitioners to
receive
part of the proceeds of the action
”.
(My emphasis).
[16]
The Supreme Court of Appeal seems to have been guided by the
development in other countries regarding
the common law prohibition
of contingency fees agreement. What is stated in paragraphs 35 to 39
of the SCA’s judgment in
Price Waterhouse
case, can be
paraphrased as follows: The United Kingdom Law Commission in 1967
recommended that prohibition of conclusion of contingency
fees
agreement in terms of the common law be done away with. The United
Kingdom Law Commission further considered the effect of
illegality of
champertous, that is, akin to contingency fees and stated that the
question whether solicitors should be permitted
to enter into
contingency fee agreements involving payment to the solicitor of an
agreed percentage of compensation recovered required
further study.
This resulted in the public condemnation of the contingency fee
agreement becoming a matter of public debate.
[17]
That led to the enactment of section 58 of the United Kingdom Courts
and Legal Service Act of
1990. The Act permitted speculative actions
in accordance with the Scottish practice and rendered enforceable,
subject to certain
conditions that is a contingency fee agreement and
the most important condition was the strict regulation of the
percentage whereby
the fee was to be increased. The Lord Chancellor
of the United Kingdom Courts was to be given the power to regulate
the increase.
Then,
Steyn LJ in Giles v Thompson and Related
Appeals
emphasised the point by stating that the ability to
recover fees beyond what was otherwise reasonable was intended to be
an incentive
to lawyers to undertake speculative actions. Such
agreements however remained unlawful in the absence of the Lord
Chancellor’s
order. It was however a clear departure from the
rationale of the common law rule that such agreements cause the duty
and interest
of solicitors to conflict with a resultant risk of abuse
of legal procedure. It clearly recognised that the abuses associated
with
champerty are not the inevitable result of all varieties of
contingency fee agreements. Steyn LJ regarded this as a consent
evidence
of a change of public policy.
[18]
Southwood AJA in paragraph [39] of his judgment in the matter
referred to in paragraph [15] above
held:
“
[39]
These developments in English law are mirrored in South African law.
The judiciary is independent. Its independence is guaranteed
by the
Constitution. The civil justice system is regulated by the state and
has the necessary mechanisms to withstand the abuses
perceived to
flow from champertous agreements. There are trained and disciplined
legal professionals who are subject to strong
ethical codes. And
there are pre-trial procedures such as discovery to ensure that
evidence is not fabricated or suppressed. There
is also the trial
itself where the veracity of the evidence can be properly tested.
There is also the cost of losing. This is a
great disincentive to the
dishonest litigant”.
[19]
I now turn to deal with the question whether Mr Joubert or Mr Louw
had entered into a contingency
fees agreement with the plaintiff, Ms
T Mucavele who acted on behalf of Mpho. For this purpose, paragraph
[41] of the judgment
in
Price Waterhouse Cooper Inc
and quoted
in paragraph [15] is very instructive particularly with regard to
section 2(1) which provides as follows:
“
Notwithstanding
anything to the contrary in any law or common law, legal practitioner
may, if in his or her opinion there are
reasonable prospects that his or her client may be successful in any
proceedings
,
enter
into an agreement with such client in which it is agreed-
(a)that the
legal practitioner shall not be entitled to any fees for services
rendered in respect of such proceedings
unless
such client is successful in such proceedings to the extent set out
in such agreement;
(b)
that the legal practitioner shall not
be entitled to fees equal
to or,
subject to subsection (2), higher than
his
or her normal fees
, set out in such
agreement, to the extent set out in such agreement”.
(My
emphasis).
[20]
This is my understanding: One cannot enter into a fee agreement based
on specific or implied
agreement that fees will only be paid upon the
success of the litigation without complying with the provisions of
the Act. Neither
can one avoid the provisions of the Act on the basis
that a legal practitioner will only be entitled to charge a fee equal
to his
or normal fees or less than his or her normal fees which
specifically or impliedly is payable on the success of litigation and
from the capital amount recovered in the litigation. To do this will
be to frustrate the principle relating to contingency fee agreements
as quoted in paragraph [29] of this judgment and the imperative in
the Act. On the other hand, subsection (2) of section 2 provides
that
any fees referred to in subsection (1)(b) which are higher than the
normal fees of the legal practitioner concerned (hereinafter
referred
to as the ‘success fee’), shall not exceed such normal
fees by more than 100 percent: Provided that, in the
case of claims
sounding in money, the total of any such success fee payable by the
client to the legal practitioner, shall not
exceed 25 percent of the
total amount awarded, or any amount obtained by the client in
consequences of the proceedings concerned,
which shall not for
purposes of calculating such excess, include any costs.
[21]
The Act is clearly meant to carefully control fees and disbursements
that are earned and incurred
on contingency basis. That is, fees
which are only payable after a successful litigation. That is the
clear intention of the legislature
in enacting the Act as clearly
stated in paragraph [41] of Southwood AJA’s judgment. The Act
was enacted to legitimise contingency
fee agreements between legal
practitioners and their clients which would otherwise be prohibited
at common law. Any contingency
fee agreement between such parties
which is not covered by the Act, is therefore illegal.
[22]
As stated in paragraph 42 of Southwood AJA judgment in
Price
Waterhouse Cooper Inc,
the Act is designed to encourage legal
practitioners to undertake speculative actions for their clients.
“The Legislature
was obviously of the view that conflict
between the duty and interests of legal practitioners
would not
lend to an abuse of legal procedure.
It is clearly considered
that
it is better that people be able to take their dispute to
court
in this way
rather than not at all”
.
(My emphasis).
[23]
“In this way”, should mean the way as prescribed in
section 4 of the Act after having
met the requirements in terms of
the Act. The procedure laid down in section 4 is meant to bring the
courts to the fore to avoid
an abuse. It is an important oversight
role that is given to protect the unsuspecting ordinary members of
the public like the plaintiff
in the present case.
[24]
Mr Joubert in paragraph 6.2 of his affidavit makes a somewhat
worrying statement as follows:
“
This is
standard practice and in my view fairer to the client than entering
into a contingency fee agreement, for the obvious reason
although the
client carries the risk of having to pay any fees and disbursements,
that payment obligation is held over until finalisation
and there is
no success fee involved”.
[25]
If this “
practice
” was to be allowed to be the
normal, the Act would not be worthy of the paper is written on. Of
course there is “success
fee” involved here. Acceptance
of a mandate to act on behalf of the plaintiff’s child
representing the child as indicated
in paragraph 6.1 of Mr Joubert’s
affidavit, and then only
recover from the capital amount,
reasonable “
attorney and own client fees as well as all
disbursements not covered in the party and party bill of costs
”,
is all coming to success fee being involved.
[26]
If indeed there is such a “standard practice” as
articulated by Mr Joubert in his
affidavit, then one should even be
more worried that it is becoming a wide-spread abuse in this Division
as we are now experiencing.
It appears that our courts are used to
rubber stamp such an abuse. In my view, this will be tantamount to
authorising something
that is illegal and in so doing, making the
courts to be part of a compromised practice. This requires vigilance
on the part of
the courts.
[27]
On 4 October 2019 under Government Gazette No. 42739 the Legal
Practice Council published rules
made in terms of section 6 of the
Contingency Fee Act 66 of 1977. Rules 1.7 thereof defines
“contingency fee agreement”
as meaning ‘any
agreement entered into in terms of the Act, in terms whereof a legal
practitioner shall not be entitled to
any fee for services rendered
in respect of proceedings unless the client is successful in such
proceedings’. The facts of
this case which are common cause in
a very material respects point to the fact that Mr Joubert expected
the plaintiff to pay and
be able to pay his fees and disbursements
only from the capital amount upon the case being successfully
finalised. This will become
clearer when one deals with the responses
to questions quoted in paragraph [4] of this judgment.
[28]
Mojapelo DJP in the matter of Masango and Another v
Road Accident Fund (2012/21359) [2016] ZAGP JHC 227;
2016 (6) SA 508
(GJ) (31 August 2019)
had an opportunity to
deal with the impact of contingency fee agreements at common law and
the Act. He held that “success
fees” are contemplated and
explained (and this was with reference to section 2 (1)), but are not
defined in section 2(2)
of the Act. They are increased fees which a
legal practitioner will be entitled to recover in the event of the
client being successful
in the litigation to the extent. Mojapelo DJP
put it this way:
“
[18]
“
Success
fees" are contemplated and explained, but are not defined,
in section 2(2) of the CFA. They are increased fees
which a legal
practitioner will be entitled to recover in the event of the client
being successful in the litigation to the extent
set out in the
agreement concluded in term of the CFA. The subsection requires the
legal practitioner and the client to specify
in the agreement what
they will regard as success in the particular litigation.
[27]
A
success fee is normal fee which has been increased by a pre-agreed
percentage. There is no
other
way of increasing the normal fee to the increased or success fee
other than through a percentage. The normal fee may be increased
by
up to 100% to reach the success fee. Success fee may thus be and is
often double the normal fee. Ordinarily a 100% increase
on the normal
fee in effect entitles the attorney to charge a fee for one matter as
if the attorney had done two matters. A double
fee is more than
sufficient incentive to the legal practitioner to pursue litigation
on a contingency basis. One can therefore
not understand the ever
increasing rampant and persistent attempt by legal practitioners
(especially attorneys) to provide for
and recover more than the
legitimate and legalised success fee.
]
[29]
Tuchten J in the matter of
Nash and Another v Mostert & Others
14395/2013 Gauteng Division Pretoria in paragraph 69
thereof had
an opportunity to refer to the cases of
Price Winterhouse Coopers
Inc and Others
supra
, South African Association
of Personal Injury Lawyers (SAAPIL) v Minister of Justice
2013 (2) SA
583
GSJ and the Ronald Bobroff and Partners Inc v De La Guerre
2014
(3) SA 134
CC (Bobroff
). Tuchten J held that these cases are
authority for the proposition that at common law, agreements between
a legal practitioner
and his client that the legal practitioner will
receive his remuneration out of the proceeds that client recovers in
litigation,
including cases before quasi-judicial tribunals such as
licensing authorities or that the legal practitioners’ right to
recover
will depend on the outcome of the litigation in a phrase
contingency fee agreements between legal practitioner and client, are
contrary to public policy, unenforceable and unlawful. In paragraph
77 of his judgment Tuchten J quoted what was held in
Bobroff
case wherein in paragraph [7] it was stated:
“
Contingency
fee agreements are a species of pacta de quota litis which were
looked upon with disfavour at common because they
were
considered to encourage speculative litigation and consequently
amounted to an abuse of legal process. Consequently, fee agreements
were singled out for particular censure because they are a form of
pacta de quota litis between a lawyer and his client, which
has
additional undesirable features. The first is that they compromise
lawyer’s relationship with his client by introducing
conflict
of interest, and have high risk of abuse. Contingency fee agreements
vest the legal practitioner with financial interest
in the outcome of
the case, which may adversely affect legal practitioner’s
ability to give dispassionate and unbiased advice
to clients at the
different stages during the proceedings. The second feature is that
contingency fee agreement gives a legal practitioner
a material
financial interest in the outcome of the litigation, and an
overriding desire to secure a successful
outcome may tempt him or her into practices
which may compromise his or her duties to the court, such as coaching
witnesses, misleading
the court falsifying evidence, etc.”
[30]
On the other hand,
Christie
in his book
The Law of Contract
in South Africa, 7
th
ed (2015) 411-413
is of the view that any system of payment by results than payment for
work done is equally bad
.
In the present case, payment for the
work done was based on a system of payment by results. This is
confirmed by Mr Joubert’s
own evidence and concessions and the
concession by Mr Mullins had it not have been good merits of the
case, Mr Joubert would not
have proceeded with the litigation. This
could only have been because the plaintiff is in no way to avoid the
litigation financially
and on the other side, Mr Joubert would not
have wanted to take the risk on a bad case. From all the authorities
cited in the preceding
paragraphs, one thing is clear. Any
entitlement to any fees for services in respect of proceedings,
payable after such legal proceedings
being successful, will be
unlawful at common law, unless it is tied up to compliance with the
provisions of the Act. I now proceed
to deal with the responses to
the questions quoted in paragraph [4] of this judgment.
Response
to question 1.1
[31]
The question required the plaintiff or her attorneys to file an
affidavit to indicate when the
alleged agreement that did not amount
to a contingency fees agreement was concluded. The response to the
question is sought to
be fortified by a consultation notes document
dated 1 September 2016 as the date on which the fee agreement was
concluded. As said,
it is not clear from the document who the
attorney was with whom the plaintiff concluded the agreement on the
date in question.
Was it Mr Louw or Mr Joubert? As the consultation
document is in Afrikaans can it be assumed that the consultation took
place in
Afrikaans? If the consultation was not in Afrikaans, why was
Afrikaans used in the consultation notes document? If the
consultation
note document was meant to constitute an agreement, why
did plaintiff not sign it? All these questions remain unanswered
because
the affidavits which Messrs Joubert and Louw deposed to are
unhelpful on the question. More so that Mr Mullins sought to suggest
that the consultation notes document has nothing to do with alleged
fee agreement something which I found strange because there
was a
purpose why Mr Joubert in his affidavit chose to introduce the
consultation notes document of 1 September 2016.
Response
to question 1.2
[32]
Because ‘no contingency fees agreement’ statement
pre-supposes that a certain fee
or estimate thereof was agreed upon,
the plaintiff or her attorney was requested to file an affidavit
furnishing information as
to when a fee the plaintiff and her
attorney agreed on was paid in full. Mr Joubert starts by putting it
this way: “
The fee is premised on the foresaid and the fact
that
the plaintiff is indigent, would require of me to fund
the litigation
”.
[33]
There it goes. The plaintiff has no money. So, the attorney
undertakes to pay the bill for the
litigation on behalf of the
client. What is it? A clear contingency fee agreement is conceded.
Particularly seen in the context
of what is averred in paragraph 16.1
of Mr Joubert’s affidavit deposed to on 24 January 2022 and
quoted in paragraph [36]
hereunder. In paragraph 14.2 of the
affidavit it is made clear that attorney’s fee has not been
paid and the statement of
account will only be drawn upon
finalisation of the matter. This should be assumed to include the
statement of accounts for services
rendered by the advocates. The
suggestion that the trustees to be appointed in terms of the proposed
draft order will administer
the funds and that he or she will also
choose or be entitled to have the bill or attorney’s fees and
disbursements be taxed,
does not make the fee agreement in question
not to be a contingency fee agreement. This is like to say, because
this is not a contingency
fee agreement, the court has nothing to do
other than to make the settlement agreement an order of court without
determining whether
the agreement on fees and disbursements is valid
and enforceable in law. This was the suggestion by Mr Mullins because
at one stage
during argument he insinuated that the court was
litigating, the statement which I think was unfortunate. The
agreement clearly
constituted a contingency fees agreement and should
be found to be illegal for non-compliance with the provisions of the
Act.
Response
to question 1.3
[34]
The plaintiff or attorney was required to indicate the amount of fees
agreed upon. Neither the
plaintiff nor the attorney sought to claim
privilege information on this question. Instead, Mr Joubert elected
to highlight that
‘the amount of the fee agreed upon was
premise on his years of experience as an expert in medical negligence
matters. He
is entitled to an attorney and client fee and the fee has
not yet been determined because the matter has not yet been
finalised,
so is Mr Joubert’s evidence or contention.
[35]
The statement can only mean that attorney and client fee will only be
determined once the claim
has successfully been finalised. Otherwise,
how do you expect an indigent litigant living in an RDP house to be
able to service
the most expensive litigation regarding medical
negligence involving about 23 or 24 experts, senior and junior
counsel and a very
experienced lawyer of many years in medical
negligence legal field that is, Mr Joubert himself. As so conceded by
Mr Joubert in
paragraph 14.1 of his affidavit deposed to on 24
January 2022, he was the one required to fund the litigation as part
of the agreement.
This could only have been based on “a no win,
no fee” principle or put differently on “a success fee”
which
without compliance with the provisions of the Act, is not
allowed and in my view, amounts to an unprofessional conduct not to
have
complied with the provisions of the Act including the relevant
provisions in the Legal Practice Act to which I make reference later
in this judgment.
Response
to question 1.4
[36]
Question 1.4 required of the plaintiff or her attorney to indicate
when any such fee paid or
remaining part thereof was supposed to be
paid. The response is articulated as follows:
16.1
As pointed out above,
fees to be recovered by me are payable upon
the finalization of the matter, once payment of the capital and
recovery of party and
party has been achieved, when the final
accounting is done
.
16.2
My attorney and own client bill of costs will be drafted at that time
and the
fee is to be agreed with duly appointed trustee or if so
required by the trustee, presented to the taxing master to be taxed”.
(my emphasis)
[37]
This is very important. To say this is not a contingency fee
agreement would be to completely
ignore the meaning of contingency
fee agreement as articulated in paragraph [1] of this judgment and
more clarified in the body
of this judgment. When Mr Joubert deposed
to an affidavit on 24 January 2022 he was responding to a directive
dated 19 January
2022. In that directive the following was stated:
“
In
Meriam-Webster Dictionary the meaning of contingency fee is ‘a
fee for services paid upon successful completion of services
and
usually calculated as percentage’.
Contingency
fee is also described as ‘any fee for services provided where
the fee is payable if there is a favourable result’.
[38]
It was further stated that “
Contingency fee generally imply
that only if a claim is successful and fees be payable, possibly on a
higher rate than normal and
from the capital amount recovered”
.
This is exactly what Mr Joubert says is the situation as indicated in
paragraph 16.1 of his affidavit quoted in paragraph [36]
of this
judgment. One cannot ignore what is stated in rule 1.7 of the Legal
Practitioners Rules issued by the National Legal Practice
Council
under Government Gazette No 42739 which was referred to in paragraph
[27] of this judgment. At the risk of repetition,
it provides as
follows:
“
1.7
Contingency fee agreement means
any
agreement
entered into in terms of the
Act, in terms whereof a legal practitioner shall not be entitled to
any fees for services rendered
in respect of proceedings unless the
client is successful in such proceedings
”
.
[39]
If the rule was to be read in isolation, one will be bound to go
astray. But taking in the context
of the historical background
alluded to in this judgment which background culminated in the Act,
it must be clear what the rule
meant to achieve. That is, any fee
agreement where client pays nothing in advance, but only pays from
the capital amount awarded
upon successful finalisation of a
litigation as it was the case here, the provisions of the Act kick
in. Otherwise, such an agreement
cannot be enforced because of its
illegality.
[40]
So, the common law principle which prohibited contingency fee
agreements was abolished with the
enactment of the Act. Contingency
fee agreements can therefore be entered into, but subject to
compliance with the provisions of
the Act so is argued in paragraph
18.1 of the defendant’s written heads filed on 2 February 2022
and this is correct. But
to conclude a contingency fee agreement as
described earlier and at common law and then do so without complying
with the Act, would
be tantamount to subverting the Act and that
remains to be outlawed as so clearly articulated by Southwood AJA in
Price Waterhouse Inc case
. So, insofar as the defendant seeks
to argue for the plaintiff on this issue, she is wrong in law and on
the facts of this case.
In any event that is a matter between the
plaintiff and her attorneys and not the defendant.
Response
to question 1.5
[41]
In question 1.5 as quoted in paragraph [4] of this judgment, the
parties, and the plaintiff in
particular, were requested to deal with
the basis upon which is alleged ‘no contingency fee agreement’
was concluded.
The answer is revealing, in particular paragraph 17.2
of Mr Joubert’s affidavit wherein he states:
“
I repeat that
no contingency fee agreement was entered into. This is despite the
fact that there was risk
and that the
plaintiff, being indigent, would clearly not have been able to pay my
fee had the matter failed.
I
took that risk
and did not negotiate a
contingency fee or a success fee…”
[42]
Mr Juobert cannot have it both. It does not matter whether Mr Joubert
negotiated a contingency
fee, a success fee or not. The issue at hand
is what was the nature of the agreement. An agreement where fees and
disbursements
are paid out of the capital amount upon favourable
finalisation of the matter can be nothing else than a contingency fee
agreement.
The risk that Mr Juobert or Mr Louw took on 1 September
2016 was based on the fact that the case looked good (
Ek se dit
klink soos ‘s goieie
eis). And this, can be nothing else,
but a success fee agreement. It was this assessment of a good case on
merits and the injuries
confirmed by the radiologist, which on 1
September 2016 drove the plaintiff’s attorneys to be prepared
to take the risk.
[43]
The addition to paragraph15 of the Division’ Directive was
meant to have strict compliance
with the imperative in the Act.
Unfortunately, this is resulting in a complete abuse where in almost
every damages claim relating
to RAF matters and matters against the
Department of Health for medical negligence, are now characterised as
“
no contingency fee agreement was concluded
”. In
many of these matters, the plaintiffs are indigent, uneducated,
vulnerable and poor. To them any money is a big money.
For this, the
potential for abuse is rife and that is what the Act is intended to
root out by clothing the courts with an oversight
role as provided
for in section 4 of the Act. It is for this reason that I intend to
refer this judgment to the Legal Practice
Council, the RAF and to the
MEC for Health for further investigation and to take such appropriate
steps as it might be necessary
to do so. The MEC and RAF are
interested parties because the defendants’ attorneys in medical
negligence and RAF matters
are so inclined with ease to agree to
reservation, preparation, consultation and qualifying fees of experts
with the magic words
“if any” included in the agreed
draft orders as it will later appear in this judgment.
Further
terms of the draft sought to be made an order of court
[44]
The parties settled the matter on the basis that the defendant, that
is, the MEC for Health in
Mpumalanga will pay an amount of R7 184
950.00 into the trust account of the plaintiff’s attorneys. In
the draft order, 24
experts are listed. Despite the matter which was
enrolled for hearing on 22 November 2021 having been settled on 11
November 2021
and immediately removed from the roll as per the
Division’s Directive, the court was still required to make the
draft order
an order of court authorising payment for preparation,
qualifying and reservation fees
(“if any”)
of all
the 24 experts listed in the draft.
[45]
Worried by why the experts should be entitled to preparation fee for
trial, qualifying and reservation
fees when the case that was
enrolled for hearing on 22 November 2021 and removed from the roll on
11 November 2021, a directive
was issued. I was also worried that by
the time the matter was laid before me, the plaintiff’s
attorneys had an opportunity
to ascertain who of the 24 listed
experts were entitled to be compensated for reservation, preparation,
consultation and for qualifying
fees. I therefore queried ‘if
any’ in the draft because there was an opportunity to establish
the facts than to want
the court to make an order in such vague terms
which always becomes a problem for the taxing masters. This practice
tends to amount
to an abuse.
[46]
It was for the reason as stated above that questions were put to the
plaintiff’s attorney
as follows:
“
4.1
Why did the plaintiff’s attorneys serve on the defendant’s
attorneys a notice in terms of rule 34 (1) on 15 November 2021 when
at that time the matter was already settled in its entirety
on 11
November 2021 and was so removed from the roll on the 11 November
2021?
4.2
Was any or all of the 24 experts subpoenaed to justify reservation
and preparation for trial or qualifying fees? If the answer is yes,
the following information must be provided on affidavit:
4.2.1
Which of the experts were subpoenaed? Proof thereof must form part of
the affidavit.
4.2.2
Which of the experts were reserved? Proof thereof must form part of
the affidavit.
4.2.3
Which of the experts prepared for trial, when and where did such
preparation take place? Proof thereof is
required.
4.2.4
Which of the experts are entitled to qualifying fees and what is the
basis thereof?
4.3
Why “if any” is used in paragraph 3.3 of the draft order
despite
the matter having been settled on 11 November 2021? In other
words, why there should not be certainty about who is entitled to
such fees as stated in paragraph 3.3 of the draft order? In this
division, we do not accept “if any” draft order as
this
poses a serious problem to the Taxing Master.
4.4
When and where did any of the consultations with the experts take
place? And,
specifically who of the experts were so consulted to
justify reservation, qualifying and preparation fees?
4.5
Who of the experts referred to in paragraph 3.4 of the draft order
“supplied
various expert joint minutes” and when were
such joint minutes served on the defendant or on each other?
4.6
When did the plaintiff’s counsel attend the pre-trial
conferences referred
to in paragraph 3.8 of the draft order regard
been had to relevant applicable provisions of the rule?”
I
will not deal with all the responses to each question, but if I do,
it will be as brief as it might be necessary.
Response
to question 4.2
[47]
The question is quoted in paragraph [46] above. According to Mr
Joubert, all of the experts were
notified of date of trial and were
subsequently reserved for trial. This appears in paragraph 21.1 of Mr
Joubert’s affidavit.
He says it is his duty to his clients to
reserve the experts. As his practice, he notifies all relevant
parties to a matter the
moment he receives a trial date. He then took
the view that preparation and reservation fees or costs will have to
be proved at
taxation. He does not issue subpoenas against his own
experts unless such experts refuse to attend court, which was not the
case
here. So, according to Mr Joubert none of the 24 experts as per
the list were subpoenaed
but were all reserved
. And as they
did not revert to him to say they were not available, they “
accepted
the reservation and undertook to make themselves available to
testify”,
so is Mr Joubert response
.
[48]
Annexure “E” is an email to the experts and was sent to
all them in one email on
9 September 2021. The matter was settled on
11 November 2021 and removed from the roll on the same date. As the
draft order was
delivered or filed for the draft to be made an order
of court on 16 November 2021, Mr Louw who had deposed to an
affidavit, should
have known better as to who of the 24 experts, is
entitled to what. Secondly, the matter having been settled on 11
November 2021,
the experts should immediately have been taken off as
witnesses to avoid unnecessary reservation, qualifying and
preparation for
trial fees, costs or disbursements. There is nothing
in Mr Louw’s affidavit or that of Mr Joubert to show that since
Annexure
E was sent to the 24 experts on 9 September 2021 which was
followed, I want to believe, by consultation or preparation for trial
to justify reservation or qualifying fees or costs for the experts.
[49]
To put every expert witness on the list of witnesses and keep them on
it on 16 November 2021
as witnesses who are entitled to such costs
and take it a step further by wanting the court to make an order in
vague terms, is
in my view, a bad and dangerous practice by the legal
practitioners and ought to be discouraged. Similarly, to state “if
any” in a court order relating to such experts entitling them
to consultation, preparation, reservation or qualifying fees
after a
matter was settled and removed from the roll on 11 November 2021 and
then contends that the taxing master will police who
is entitled to
such costs is also a bad practice that is subject to be abused. The
taxing master deals with the reasonableness
of costs or fees and not
necessarily who is entitled thereto. It is the court to determine who
of the experts is entitled to fees,
costs or disbursements. The
making of an order for such costs in respect of specific experts and
then introduce (“
if any
”) instead of being
specific, is the kind of orders which in this Division, we are not
prepared to accept as a good practice
because once such an order is
made the taxing master is bound thereby and all what is left is for
the taxing master, is to determine
the reasonableness of their fees
and so forth.
[50]
Look at what had ultimately happened in the present case. What Mr
Joubert had initially insisted
on in his affidavit of 24 January 2022
ended up with Mr Joubert having to say the issue of the alleged
preparation, consultation,
reservation and qualifying fees has become
“moot”. The mootness was only introduced after the 24
experts were directed
to file affidavits to confirm that they were so
entitled to consultation, preparation, reservation and qualifying
fees. It was
this inquiry which resulted into a U-turn by claiming
that the issue of such costs was moot.
[51]
In the affidavit of Mr Joubert deposed to on 1 February 2022, one is
now told that ‘
due to the time constraints and most of the
experts being extremely busy to the ensuing effect of the Covid
pandemic, I was not
able to obtain affidavits from each experts as
directed and I will however endeavour to obtain these affidavits by
the 9
th
of February 2022’
. The 9th
February 2022 came and passed and there were still no affidavits by
the experts as directed by the court. Perhaps it makes
sense that the
affidavits were never forthcoming.
[52]
Look at it this way: Having said what is stated in paragraph [51]
above, then in paragraphs 4.3
and 4.4 of the affidavit of 1 February
2022 Mr Joubert stated as follows:
“
4.3
What I was able to do is to request the final accounts from each
expert. Out
of the 23 experts none has have charge (sic) a
reservation fee. I attach hereto as annexures “A” to “Z”
the accounts of all of the experts including that they only charged
for compilation of their respective reports.
4.4
I therefore submit that the point regarding reservation, preparation
and qualifying fees has become moot”.
[53]
Unfortunately, Mr Joubert cannot have it both. He cannot have experts
about whom he had
insisted
that they had been reserved and now
say the issue is moot or academic because instead of asking for their
affidavits as directed
by the court, he on his own elected “to
request the final accounts from the experts”. When they
provided him with the
final accounts without other costs as asserted
by him on affidavit, he saw his insistence on the reserved,
preparation, consultation
and qualifying fees as being moot or
academic. The point is this: The court was meant to believe that such
witnesses are indeed
entitled to preparation, consultation and
qualifying fees based on the insistence by Mr Joubert as it appears
in his affidavit
deposed to on 24 January 2022. The insistence was so
made despite and after an enquiry by the court as quoted in paragraph
[46]
of this judgment was made. The red light raised in the enquiry
did not deter Mr Joubert from insisting that such costs have been
incurred. It was this insistence that prompted the court to direct
that the experts should speak for themselves on the issue as
it would
appear later in this judgment.
[53]
Mr Joubert instead of asking for their confirmatory affidavits as so
directed by the court, he
resorted to asking them to provide their
reports arising from medico-legal examinations which is often a once
off examination.
The statement quoted in paragraph [52] of this
judgment gives that impression more so that as on 9 February 2022 the
affidavits
were still not filed as so promised. It is very
interesting that amongst all the 24 experts, not even a single one
filed confirmatory
affidavit as directed by the court. Instead, all
of them filed their accounts for the compilation of their reports.
Was it so difficult
then to show in their accounts how much they have
charged for the other costs which Mr Joubert in his affidavit of 24
January 2022
insisted that they have been incurred?
[54]
This is a matter that one cannot do without referring it to the
professional body to investigate
the appropriateness or otherwise of
the conduct of Mr Joubert and or Mr Louw regarding their failure to
comply with the contingency
fees agreement and regarding the
insistence that experts were entitled to reservation, preparation,
consultation and qualifying
fees. The Legal Practice Council will be
required to update the court on their investigation, should I find it
necessary to do
so.
[55]
The Legal Practice Council by proclamation of rule 1.7 referred to in
paragraph [38] of this
judgment, shows that it takes seriously the
question of strict compliance with the provisions of the
Contingency
Fees Act and
Legal Practice Act regarding contingency or any fee
agreements in general. Unfortunately, legal practitioners seem to be
in the
practice of ignoring this and their own obligations in terms
of section 35 of the Legal Practice Act to which I make reference
later in paragraphs [75] to [78] of this judgment. As indicated
previously in this judgment, the majority of the legal practitioners
in RAF and medical negligence matters seem to take the view that they
can do without the provisions of the Act by stating that
“no
contingency fees agreement has been concluded”. That has to be
rooted out. It is also the duty of Legal Practice
Council to do so.
Our courts must also be vigilant. Otherwise, the courts may find
themselves unintentionally facilitating promotion
of wrong things in
the form of court orders
The
imperative in paragraphs 30, 32 and 34 of the code of conduct
regarding fee agreements between attorneys and advocates.
[56]
In my view, paragraph 32.1 of the legal practitioners’ rules or
code of conduct dealing
with prohibited agreements between attorneys
and advocates should apply with full force to fees agreement between
attorney and
client insofar as any such fee agreement is intended to
be heeded to upon successful litigation. It is prohibited in terms of
paragraph
32.1 of the code of conduct for an advocate to charge a fee
on the successful result of a litigation or agree to reduce or waive
fees if a positive result is not achieved. Charging of a fee on the
result, is subject to the provisions of the Act.
[57]
Furthermore, in terms of paragraph 32.2 of code of conduct, counsel
is prohibited from agreeing
to charge a fee
as allowed on taxation
except in a matter undertaken on contingency or as permitted in terms
of the
Contingency Fees Act.
All
this brings one to deal with the
question as what was a fee agreement between the plaintiff’s
attorney and the two counsel
who are said to have been part of the
litigation until up to settlement thereof on 11 November 2021. One of
them is said to have
been Adv Venter who appeared together with Mr
Mullins SC on behalf of the plaintiff in the present proceedings
before me.
[58]
In dealing with the topic under discussion, I find paragraph 34 of
the code of conduct to be
of relevance. It deals with the marking of
briefs and submission of fee accounts for services rendered.
Paragraph 34.1 thereof
is peremptory and it provides that counsel
shall
render an account monthly of all fees owing by every
debtor. The present litigation started in 2016. Seen in the context
of the
consultation document referred to earlier in this judgment, I
want to believe that the plaintiff’s attorney instructed
counsel
in September 2016 or immediately thereafter. Insofar as the
plaintiff’s attorney insists that no contingency fee agreement
was concluded between him and the plaintiff, one would have expected
that in a true non-contingency fees agreement, the plaintiff
would
have made payment upfront or immediately after counsel accounts were
rendered in terms of
rule 34.1
referred to above.
[59]
At the start of the hearing herein, counsel, that is, Mr Venter and
Mr Mullins were asked if
they were counsel involved on behalf of the
plaintiff in the litigation that resulted in the settlement agreement
between the plaintiff
and defendant. And if so, whether they feel at
ease in proceeding with the current hearing which may touch on their
own professional
conduct and they may end up having to defend
themselves. Mr Mullins SC indicated that they were indeed so
instructed at all the
stages of the litigation herein and that there
was nothing in their conduct that makes them to feel unease in making
presentations
in the present proceedings. And, that if they had to
defend themselves they will do so. I deal later with what were his
submissions
in relation to paragraphs 32 and 34 of the code of
conduct referred to in the preceding paragraphs.
[60]
I however pause for a moment to deal with what Mr Mullins SC’s
contention was with regards
to the question whether the nature of the
fees agreement his instructing attorney concluded with the plaintiff
amounted to a contingency
fee agreement or not. During his oral
argument, he sought to explain his understanding of contingency fee
agreement by making a
statement as follows:
“
Prohibited
contingency fee agreement at common law was (and I use the word
advisably, we now have an Act which governs the position),
an
agreement in terms of which an attorney agrees not to charge a fee if
the matter is unsuccessful and stipulated increased fee
if it is
successful”
[61]
The statement above, coupled with the use of words “advisably”
and “prohibited”
which words were repeated by Mr Mullins
SC, gives one the impression that Mr Mullins was conceding that the
agreement in question
was contingency fee agreement but that it was
not prohibited. For his meaning of a contingency fee agreement as
quoted above, he
seemed to rely on paragraph 40 in the matter of
Price Waterhouse
and paragraph 7 in the matter of
SAAPIL
cited in paragraph [29] above. Perhaps in dealing with the question
whether such an agreement as described by him is prohibited
or not,
one should start first, with his own code of conduct as a legal
practitioner insofar as he might have wanted to suggest
that the
imperative in paragraphs 32 read with 34 of the Code of Conduct did
not apply to him and his attorneys.
[62]
I referred to paragraphs 32 and 34 of the code of conduct in
paragraphs [56] to [59] above. At
the risk of repetition, the two
paragraphs of the code of conduct are crafted as follows:
“
32
Prohibited fee agreements between counsel and attorney
32.1 Counsel
shall not agree to change on results or agree to reduce or waive fees
if a possible result is not achieved,
except in a matter taken on
contingency in terms of the
Contingency Fees Act 66 of 1997
and/or
save as contemplated in section 92 of the Act.
32.2 Counsel
shall not agree to charge a fee as allowed on taxation
except in a
matter undertaken on contingency or as permitted in terms of section
92 of the Act.
34
Marking briefs and submitting fees accounts
34.1
Counsel
shall
mark a fee as soon as practicable after the
specific service
has been rendered
and shall render an
account monthly of all fees owing by every debtor.
34.2
…
34.3
…
34.4
…
34.5
…”
[63]
Mr Mullins conceded that he had never, as I understood him, rendered
any fee account as required
in terms of paragraph 34.1 of the code of
conduct and that he did not have to do so despite the fact that he
did not enter into
a contingency fee agreement with the instructing
attorney. He first suggested that in terms of Bar’s rules to
which he belongs
and is prepared to report himself to, he was only
obliged to render such an account or accounts within three months
upon specific
service shall have been rendered and that the three
months’ period had not expired as yet, so was his contention.
Two issues
arise from this contention. First, the Bar’s rule
cannot supersede the code of conduct in paragraph 34.1 which is
peremptory.
Second, it was not the first time that Mr Mullins and his
junior Mr Venter had rendered specific legal services in the matter.
But still, as I understood Mr Mullins, they never rendered or
submitted the accounts to the instructing attorney for payment. In
addition, he was apparently never paid anything since the start of
the litigation in 2016.
[64]
The need to instruct counsel was mooted by Mr Louw or Mr Joubert on 1
September 2016 when consultation
with client took place. Those
counsel referred to in the consultation document or note appear to
have been Mr Mullins and Mr Venter.
In 2020 the matter was set down
for hearing to deal with the question of liability. The date of
hearing was agreed upon amongst
the parties as 3 August 2020. On 29
July 2020 the matter was settled on merits and removed from the trial
roll of 3 August 2020.
If these facts are correct and Mr Mullins and
Mr Venter were counsel for the plaintiff throughout, one would have
expected compliance
with paragraph 34.1 read with 32 of the Code of
Conduct. Perhaps it makes sense why compliance with paragraphs 32 and
34 of the
code of conduct could not have taken place. How the
plaintiff could have been in a position to settle their fees account?
It is
irresistible to come to the conclusion that the litigation on
behalf of the plaintiff was conducted on the basis of contingency
without complying with the provisions of the
Contingency Fees Act.
This
is clearly a matter reportable to the legal professional body,
namely, the Legal Practice Council.
[65]
Mr Mullins also sought to distance himself from the consultation
notes document of 1 September
2016. The contention was that the
document has nothing to do with the fees agreement and that it did
not form part of Mr Joubert’s
affidavit for the purpose of
seeking to show that the fees agreement in question did not amount to
contingency fees agreement.
This contention cannot be correct. Look
at it this way: In paragraph 9 of his affidavit deposed to on 24
January 2022 Mr Joubert
stated:
“
I further
explained to her (
referring to during
consultation on 1 September 2016
) that the
fees payable to me will be determined at the finalisation of the
matter and that I would be entitled to recover my reasonable
attorney
and own client fees which may be agreed with her or if requested be
determined by a taxing master and that any fees will
be determined
based on my seniority, experience, difficulty or intricacy of the
matter in proving her claim and that certain items
in respect of fees
will be recovered from her as on attorney and client fees even though
they might be allowed on party and party
scale”.
[66]
“
Fees will be recovered from her on attorney and client
fees
” could only have meant “recovered from the
capital amount”. In paragraph 10 of the affidavit aforesaid, Mr
Joubert
continued to state that “
we did not enter into a
contingency fee agreement with the plaintiff”
. Having said
this, he concluded on the topic as follows:
“
I
attach herewith a copy of the consultation note, marked Annexure “A”
in confirmation of the aforesaid…”
[67]
I understand “the aforesaid” as being reference to a copy
of the consultation notes
document and the suggestion that there has
not been a contingency fees agreement concluded and that the fee
agreement in question
was based on charging reasonable fees. Well,
the reasonableness of fees is also applicable under the Act. That is,
there is a curb
with regard to the higher fee that might be charged
in terms of subsection (2) of section 2 of the Act. It is not free
for all
and the sky is not the limit under the Act regarding
permissible fees to be charged. It must in fact be assumed that every
fee
charged by an attorney to client must be reasonable with or
without the application of the
Contingency Fees Act.
[68
]
The prohibition of any contingency fees agreement at common law
unless it complies with the curb
in terms of the Act, the prohibition
of certain fees agreement in terms of the Code of Conduct and under
the Legal Practice Act
alluded to earlier in this judgment, is aimed
at fees agreements concluded without a client having paid a cent and
such fees must
be reasonable. Anything contrary to this legislative
imperative, is susceptible to an abuse at a huge prejudice to those
who find
themselves in a desperation situation. Such agreements
without upfront payment of fees or immediately thereafter for legal
services
rendered, and payment of fees from the capital amount
arising from a successful litigation, was meant to be controlled
under the
Act with careful oversight or protection valves mechanism
by the courts as so enjoined to do in terms of section 4 thereof.
[69]
I would want to believe that the consultation document or note
referred to in paragraph [66]
above, was annexed to Mr Joubert’s
affidavit to show that there was a fees agreement not based on
contingency but on its
reasonableness regarding fees to be charged.
But that is not what the consultation note or document shows. First,
it says nothing
about “reasonableness of fees”. Second,
in the document nothing is said about an hourly rate or an estimation
of chargeable
fees including that of counsel who was promised on 1
September 2016 to be briefed. This should have been done. What is
applicable
to fees agreement between an instructing attorney and
counsel, in my view, should apply to any agreement between an
attorney and
client.
[70]
Paragraph 30.2 of Code of Conduct provides that counsel shall at the
time of accepting a brief,
stipulate to the instructing attorney the
fee that will be charged for the service or the daily or hourly rate
that shall be applied
to computing a fee. This, in turn, must be
conveyed to and agreed with a client. Furthermore, paragraph 30.3 of
the code of conduct
of relevance provides that counsel shall, in
respect of every brief, expressly agree with the instructing attorney
the fee or the
rate of fees to be charged. In my view, what is
stipulated in paragraphs 30.2 and 30.3 of the Code of Conduct is what
is expected
of every attorney who concludes a fee agreement with
client whether client pays upfront or at the conclusion of a
successful litigation
as is the case here, except that with the
latter, the Contingency Fess Act will also apply.
[71]
Perhaps the meaning of the word “contingency” needs to be
explored further and see
if it fits into the facts of the present
case. According to the
UK Dictionary
, the word “contingency”
means ‘
a future event or circumstance which is possible but
cannot be predicted with certainty’
and according to the
Legal Dictionary
, “contingency” ‘
refers
to an event that may or may not occur in the future’
. In
other words, it depends on fulfilment of a condition, which is
uncertain or incidental. Mr Joubert who knew that the plaintiff
was
indigent and could not afford any legal costs, took a chance. This is
common cause. He took that chance after having assessed
the merits of
the plaintiff’s claims and came to conclusion the merits were
good. If the merits were not good, he would not
have proceeded with
the litigation. The outcome of the litigation remained uncertain
which uncertainty resulted in the parties
discounting the risk on a
50/50% basis.
[72]
During argument, Mr Mullins conceded that if on 1 September 2016 the
attorney for the plaintiff
did not come to the conclusion that there
was a good case, they would not have proceeded with the claim. It
boggles one’s
mind that despite this concession, it was still
persisted that the agreement with the plaintiff did not amount to
contingency fee
agreement. It is common cause that payment of the
legal fees was dependent on the success of the litigation and was to
be paid
from the capital amount that may be recovered in the
litigation. All was therefore dependent on “no win, no fee”
model
or on the so called “success fee”.
[73]
One must accept that ‘
the recovery of contingency fee is
hourly rated. In fact, most law firms make their money by billing
their clients by the hour.
In order to be profitable they make enough
money from billable hours not only to cover salary and overheads, but
also to generate
revenue for the firm’
. This is the view
expressed in
Gace-Law School.
[74]
What is stated in paragraph [73] above is not a factor to be
considered in isolation. It has
to be seen in the context of what is
required as stipulated in paragraph 30.2 of the code of conduct. It
is expected that in the
acceptance of a brief, counsel shall
stipulate to the instructing attorney
the fee that will be charged
for the service or the daily or hourly rate that shall be applied to
computing a fee
. Look at the consultation document of 1 September
2016. Nothing is said about the amount of daily or hourly rate of the
attorney
and neither is that of the advocate stipulated. The
plaintiff uneducated as she might be and indigent as she is, was put
in no
position to determine the reasonableness of the fees. But most
importantly, there were many opportunities the attorney and counsel
for the plaintiff had to stipulate their daily or hourly rate in
affidavits or during argument. But that did not happen. At the
same
time, it is contended that contingency fee did not apply because the
agreement with client was that of a reasonable fee per
hour without
being specific as it appears in the consultation document or note in
question. (My emphasis).
Attorney’s
fees in respect of legal services and agreement in relation thereto
[75]
A fee agreement is also known as a mandate agreement. It is a signed
agreement and it regulates
the payment terms between the attorney,
attorney’s firm and client. The attorney and client would agree
to a fee arrangement
on an hourly basis. The fee agreement will
clearly stipulate what the attorney’s hourly charge is. Before
an attorney commences
on a matter, the client may be requested to
deposit a certain amount money into the trust account of an attorney
to ensure that
fees and disbursements would be covered. In the course
of litigation an amount of fee initially agreed upon and paid, may be
depleted.
It is expected that when a fee agreement is concluded, such
a possibility will be explained and that it would be agreed when an
invoice will be provided to client and it will also be stipulated
when additional payment will be made upon submission of an invoice.
This has been a practice for many years and it has almost become
unwritten rule in the legal provision. Similar provisions are
found
elsewhere in the Legal Practice Act although not proclaimed yet.
[76]
In the face of the facts of the present case, Mr Joubert has no
escape route. He cannot rely on his
assertion of reasonable fees
agreement with his client and at the same time find no need to comply
with a well-established practice
as explained in the preceding
paragraph. I actually find it difficult to understand why section 35
of the Legal Practice Act is
not proclaimed. Its core purpose must be
obvious. That is, to protect the vulnerable litigants who are mostly
uneducated and poor,
especially in RAF and medical negligence
matters. It is even more necessary and worrying now that the legal
practitioners in this
Division seek to side-step an oversight of the
court in terms of section 4 of the Contingency Fee Act by stating
that “no
contingency fee agreement has been concluded with
client”. We have recently discovered that in more than 60% of
RAF matters
settled, is alleged that no contingency fee agreement has
been concluded as was the case in present proceedings against the MEC
for Health.
[77]
The statutory obligation in
section 35
of the
Legal Practice Act No.
28 of 2014
is very important and the sooner is proclaimed in its
entirety the better.
Section 35
(7) provides that when an attorney
first receives instructions from client for rendering of
litigious-legal services, or as soon
as practically possible
thereafter, he or she must provide the client with a cost estimate
notice in writing specifying all particulars
relating to the
envisaged costs of legal services, including; (a) the likely
financial implications including fees, charges, disbursements
and
other costs; (b) the attorney’s or advocate’s hourly fee
rate and an explanation to the client of his or her right
to
negotiate the fees payable to the attorney or advocate, (c) an
outline of the work to be done in respect of each stage of the
litigation process, where applicable; (d) the likelihood of engaging
an advocate, as well as an explanation of the different fees
that can
be charged by different advocates, depending on aspects such as
seniority or expertise and (e) if the matter involves
litigation, the
legal and financial consequences of the client’s withdrawal
from the litigation as well as costs recovery
regime.
[78]
In addition to providing client with a written costs estimate notice
as contemplated in subsection
(7) of
section 35
aforesaid, the
attorney in terms of subsection (8), must verbally explain to the
client every aspect contained in that notice as
well as any other
relevant aspect relating to the costs of the legal services to be
rendered. In terms of subsection (9) thereof,
a client
must
,
in writing agree to the envisaged legal services by that attorney or
advocate referred to in
section 34(2)(b)
and the incurring of the
estimated costs as set out in the notice contemplated in subsection
(7). Non-compliance by any attorney
with the provisions of
section
35
, constitutes a misconduct in terms of subsection (10).
[79]
Subsection (11) is also very important for the present proceedings.
It provides that if attorney
does not comply with the provisions of
this section (referring to
section 35
of
Legal Practice Act),
the
client is not required to pay any legal costs to that attorney until
the council has reviewed the matter and made determination
regarding
amounts to be paid.
Similarly, subsection (12) of
section 35
is
also important for the present case. It provides that the provisions
of this section do not preclude the use of contingency
fee agreements
as provided for in the
Contingency Fees Act… (My
emphasis).
[80]
What is provided in subsections (7) to subsection (12) is similar to
the well- established practice
as explained earlier. Failure to
comply therewith along the provisions of
section 35
is laid bare for
everyone to see in the present case. Any suggestion to rely on the
asserted no contingency fees agreement regarding
reasonable fees
without complying with the imperative in the established practice,
has no legal basis. One may ask why the provisions
of
section 35
detailed as it is, is so necessary. First, it is intended to avoid
client being caught unaware with exorbitant legal fees and costs
or
disbursements. That too is the purpose in the established practice.
The practice like
section 35
is also intended to curb an abuse in
charging higher fees not properly discussed and agreed with client
and also without complying
with the Contingency Fee Act. For this
purpose, the plaintiff in the present case is not obliged to pay any
legal costs to her
attorney until Legal Practice Council has reviewed
the matter and made determination regarding the amount of fees to be
paid, should
the Legal Practice Council so decide. I deal later with
the appropriate remedy. It suffices for now to mention that any fee
agreement
which does not comply with the peremptory provisions of the
Contingency Fees Act, is
illegal and unenforceable.
Alleged
preparation, consultation, reservation and qualifying fees of the 23
experts
[81]
In paragraph 3.3 of the draft order the court is expected to make an
order of court by agreement
between the parties. The draft order
inter alia, is crafted as follows:
“
The reasonable
preparation/qualifying and reservation fees (
if
any
) of the experts referred to in
paragraph 3.2 above,
including the
costs of consultations (if any) with the legal team”.
(My
emphasis
).
In
paragraph 3.2 referred to in the quotation above, 24 experts are
listed as being entitled to such costs as described in the quotation.
[82]
This part of the draft order was so crafted as quoted above despite
the followings: As indicated
earlier in this judgment, the case was
enrolled for hearing on 3 August 2020 to deal with the question of
liability only. On 29
July 2020 the question of liability was settled
on 50/50% discounting of liability. The case was then removed from
the trial roll
of 3 August 2020. Subsequent thereto, the matter was
enrolled for hearing on 22 November 2021 to deal with the question of
quantum.
This too was settled on 11 November 2021 and the matter was
accordingly on the same day removed from the trial roll of 22
November
2021 supposedly in terms of paragraph15 of the Division’s
Practice Directive dated 9 January 2020 as amended. On 16 November
2021, one of the plaintiff’s attorneys, that is, Mr Louw
deposed to an affidavit and submitted the draft order in question
to
be made an order of court by agreement between the parties.
[83]
One would have thought that the matter having been settled on 11
November 2021 and removed from
the trial roll including the initial
removal from the trial roll of 3 August 2020 regarding liability, as
on 16 November 2021 or
at least before the request was made on 16
November 2021, the plaintiff’s attorneys would have known or
expected to have
known as to who of the 23 experts were entitled to
the fees as articulated in paragraph 3.3 of the draft order and
quoted in paragraph
[81] above. Instead, the parties opted for “if
any” on something that could easily have been established or
ascertained
before the request for the draft order to be made an
order of court was filed. I find “including the costs of
consultations
(
if any
) with legal team” as quoted in
paragraph [81], is even most astonishing. First, no such an order is
usually made. That forms
part of the general costs order. Second, why
an attorney should be uncertain as to who of the experts he or she
has consulted with,
is mind boggling to the extreme. I suspect this
could only have been intended to tie up the taxing master hands by
using a court
order. Vigilance by the courts with this kind of draft
court orders is necessary. But most importantly defendants’
attorneys
in matters like the RAF and Department of Health attorneys
should be more vigilant and not allow themselves to be taken for a
ride
at a huge legal costs to the prejudice of their clients like it
nearly happened in this case.
[84]
What is stated above, prompted this court to give a directive of
relevance, drafted as follows:
“
4.2
Was any or all of the 24 experts subpoenaed to justify reservation
and preparation for trial or qualifying fees? If the answer is yes,
the following information must be provided on affidavit:
4.2.1
Which of the experts were subpoenaed? Proof thereof must form part
of
the affidavit.
4.2.2
Which of the experts were reserved? Proof thereof must form part
of
the affidavit.
4.2.3
Which of the experts prepared for trial, when and where did such
preparation take place? Proof thereof is required.
4.2.4
Which of the experts are entitled to qualifying fees and what is
the
basis thereof?
4.3
Why “if any” is used in paragraph 3.3 of the draft
order
despite the matter having been settled on 11 November 2021? In other
words, why there should not be certainty about who is
entitled to
such fees as stated in paragraph 3.3 of the draft order? In this
division, we do not accept “if any” draft
order as this
poses a serious problem to the Taxing Master.
4.4
When and where did any of the consultations with the experts
take
place? And, specifically who of the experts were so consulted to
justify reservation, qualifying and preparation fees?
4.5
Who of the experts referred to in paragraph 3.4 of the draft
order
“supplied various expert joint minutes” and when were
such joint minutes served on the defendant or on each other?
4.6
When did the plaintiff’s counsel attend the pre-trial
conferences referred to in paragraph 3.8 of the draft order regard
been had to relevant applicable provisions of the rule?
4.7
Why should a specific order be made with specific reference
to
paragraphs 3.6, 3.7, 3.9 and 3.10 of the draft order instead of
leaving same to the discretion of the Taxing Master?”
[85]
The plaintiff’s attorneys were directed to file an affidavit to
deal with the questions
so posed in the preceding paragraph and were
also given an opportunity to file written heads of argument if they
so wished. Mr
Joubert on behalf of the plaintiff filed both the
affidavit and written heads. Dealing with the reservation,
consultation, preparation
and qualifying fees, the responses can be
paraphrased as follows: Due to the complexity of the matter and scale
of quantum, all
of the experts were notified and subsequently
reserved themselves for trial. For this, Mr Joubert attached an email
which was sent,
I want to believe, to all the listed 23 experts. The
email of 9 September 2021 reads as follows:
“
Good morning.
We refer to the above matter. The matter has been set down for trial
for 22 November 2021”.
I
am unable to see how a statement like this can constitute
reservation, including entitlement to qualifying, consultation and
preparation fees and or costs
.
Response
to questions 4.2, 4.2.1 and 4.2.2
[86]
I now turn to deal with the responses to some of the questions quoted
in paragraph [84] above.
What Mr Joubert regards as “subsequently
reserved themselves” referring to the 23 experts, if it is
based on the email
of 9 September 2021 as quoted above, it then does
not make sense. It is not clear how they have so “reserved
themselves”.
The problem however is that by the time the email
of 9 September 2021 was so despatched, it was expected that Mr
Jourbert and his
counsel would have already identified who of the 23
experts would be required for evidence on quantum including some of
those who
might have been involved during the proceedings on
liability issue. Secondly, writing one email to all the 23 experts
and inform
them that the matter has been set down for hearing on 22
November 2021 without more, as it has happened here, can never be
regarded
as the basis to come to the conclusion that every one of the
experts had been reserved and that every one of them was entitled to
consultation, preparation, reservation and qualifying fees. As at the
time the matter was settled on 29 July 2020 and 11 November
2021
respectively, it is expected that the plaintiff’s attorney
would have been specific about who was entitled to reservation,
consultation, preparation for trial and qualifying fees on liability
and on quantum.
[87]
Mr Joubert articulates in paragraph 21.1.1 of his affidavit that it
is his duty to reserve experts.
But, he cannot be heard to be saying
he is obliged or entitled to do so in respect of every expert simply
on the basis that such
experts compiled medico-legal reports. It is
expected that some reports in the course of consultation, preparation
for trial and
negotiation for settlement will fall by the way side.
It is unthinkable that an attorney who is experienced as Mr Joubert
will
resort to such practice unless the motive is to unduly pile up
unwarranted costs, using the courts to authorise such costs. This
standard practice in the office of Mr Joubert’s office and wide
spread as we have now lived to see, does not make sense.
The
statement “
I notify all
relevant
parties to a matter the moment I receive a trial date”
as
alluded to in paragraph 21.1.2 of his affidavit deposed to on 24
January 2022, I want to assume that it includes also “
all
relevant
experts”. It has to be relevant experts and not
just club all of them together as being entitled to all sorts of fees
simply
because they compiled the medico-legal reports.
[88]
In paragraph 21.3 of his affidavit Mr Joubert alludes to the fact
that he does not issue subpoenas
against his own experts unless an
expert refuses to testify at court. None of the experts to whom the
email of 9 September 2021
was addressed, was asked to attend court to
give evidence at trial on 22 November 2021. Instead they were in one
sentence told
of the date of trial. That is not reserving the
experts. The statement, ‘
none of the experts were
subpoenaed,
but only were all reserved
’
,
is clear insistence that all the experts were so reserved and by
implication that they were all entitled to reservation, consultation,
preparation and qualifying fees. The experts are further said to have
‘
accepted the reservation and undertook to make themselves
available to testify’
. There is nothing which confirmed
this assertion by Mr Joubert in his affidavit despite the court’s
attempt to induce such
confirmation. If indeed all the 24 experts
‘
accepted the reservation and undertook to make themselves
available to testify’
, there was then no need to include in
the draft the words “if any”. I deal later with the
difficulty the taxing masters
are confronted with in the words “if
any” being included in a court order, an issue which of course
Mr Joubert refuses
to accept as significant.
[89]
I find it particularly worrying that Mr Joubert now cannot ‘
speak
to which of the experts prepared for trial or how and where they did
so’
as it appears in his affidavit
.
The statement ‘
I
emphasise that whether any of the experts prepared for trial (as the
matter became settled, but only fairly close to the trial
date, and
if so to what extent (and when and where) they did so will have to be
proven at taxation’,
is equally worrying and not looking at
the principle issue at hand. The point is this: The matter having
first been settled on
29 July 2020 regarding merits and 11 November
regarding quantum, by 16 November 2021 when Mr Louw deposed to an
affidavit wanting
the draft to be made an order of court, he should
long have known who of the experts was entitled to reservation,
preparation,
consultation and qualifying fees. He could easily have
ascertained from his own notes or from the experts themselves who of
them
were entitled to such costs before the matter was referred on 16
November 2021 for the draft to be made an order of court.
Difficulties
posed by the words (“
if any
”) to the taxing
masters during taxation
[90]
It has become a practice by the legal practitioners in damages claim
cases to use the words “if
any” in draft orders to be
made orders of court upon settlement particularly regarding fees and
costs in matters involving
RAF and the Health Department. This is
often followed by settlement of the bill of costs to which there is
also a practice that
once an order for costs is made in such vague
terms and once items on the bill costs are settled, the taxing master
will be told
all what he or she has to do is to “stamp”
the bill of costs by issuing the allocatur
.
One had an
occasion to deal with this practice in the matter of
Smith and
others v MEC for Health Mpumalanga (571/2017) [2021] ZAMPMHC 2;
2021
2021 (6) SA 532
(ML) (3 February 2021)
when the taxing mistress
in this Division was reported by an attorney for disciplinary
investigation after she had refused to rubber
stamp settled items in
the bill of costs without considering the reasonableness of fees and
costs charged for each item.
[91]
Draft court orders with hidden words (“
if any
”)
pose and is bound to cause a serious problem to the taxing masters.
The suggestion to make such an order and then contend
that the taxing
master will still exercise his or her discretion as to who is
entitled to be paid for fees and or disbursements
regarding certain
items in the bill costs, has its own dynamics and difficulties. Very
often the taxing consultants used by attorneys
rely on the court
orders by asserting that the court had authorised such costs and that
the taxing master has no basis to question
the reservation,
preparation, consultation and qualifying fees for specific experts.
The abuse is that even the experts who may
not be entitled to such
fees and costs find themselves forming part of the bill of costs
beyond the compilation of the medico-legal
reports. It is for this
reason that one has to be apprehensive when such draft orders with
the words “if any” are presented
to be made orders of
court. The agreement with ease by defendants’ attorneys to the
words “if any” in a draft
order promotes the abuse. We
see this on daily basis. Such settlement agreements expressed in such
vague and uncertain terms, should
not easily be resorted to unless
there are good reasons to do so. It has become a practice for the
defendants’ attorneys
in RAF and medical negligence matters as
it has happened in the present case to concede to such phraseology
without questioning
and thus becoming part of an abuse at a huge
unwarranted and unjustified legal costs for the defendants. It cannot
be a problem
for attorneys on behalf of the plaintiffs to establish
which of the witnesses are entitled to which costs before a draft
order
is sought to be made an order of court. Once an order is made
in such vague terms by including (“if any”) for specified
experts, the taxing master’s authority is limited except for
only deciding on the reasonableness of such costs or fees and
not who
is entitled to them.
Directive
for confirmation by experts due to failure to heed to the previous
directive
[92]
With the challenges and concerns in mind as alluded to in the
preceding paragraphs, after having
been provided with an affidavit by
Mr Joubert deposed to on 24 January 2022, the plaintiff or her
attorneys were further directed
as follows:
“
6.
As regards to the averments made with reference to the reservation,
preparation,
consultation and qualifying fees, it is hereby directed
that the experts in particular those who assert that they had been
reserved,
consulted with for the purpose of trial, prepared for trial
or are entitled to qualifying fees, should so file affidavits by not
later than 12h00 Wednesday 2 February 2022 confirming same and the
particulars thereof should be provided regard being had to the
fact
that the matter was settled in its entirety and removed from the roll
on 11 November 2021”
[93]
Mr Joubert in his affidavit deposed to on 1 February 2021 responded
thereto of relevance, as
follows:
“
4.2
Due to the time constraints and most of the experts being extremely
busy due to the
ensuing effect of the Covid pandemic I was not able
to obtain affidavits from each expert as directed. I apologise for
this and
will however endeavour to obtain these affidavits by the 9
th
of February 2022.
4.3
What I was able to do is to request the final accounts from each
expert. Out
of the 23 experts none have charged a reservation fee. I
attach hereto as annexures “A to Z5” the accounts of all
of
the experts indicating that they only charged for compilation of
their respective reports.
4.4
I therefore submit that the point regarding reservation, preparation
and qualifying
fees has become moot.
[94]
Very late in the afternoon of 8 February 2022 Mr Joubert filed
another affidavit in which he
stated as follows:
“
3.1
In endeavouring to obtain the affidavits as requested I contacted the
experts. They advised me that
premised on the fact that they are not
charging fees for preparation, qualifying and reservation for trial
they are not in a position to depose to
such affidavits as it would result in them utilising their profession
time to attend thereto
and as such will have a costs implication to
client
”.
(My
emphasis)
.
[95]
At the start of the hearing of this matter on 9 February 2022,
counsel for the plaintiff was
asked to deal amongst others, with the
following questions:
“
6.
Did the experts have a choice not to file the affidavits as so
directed
by the court? And if so, on what basis are they so entitled?
7.
If they were so obliged as directed, what is proposed this court
should do with such failure to file the affidavits as so directed?”
[96]
Mr Mullins SC, in my view dealt with the matter as Mr Joubert did in
his affidavits of 1 and
8 February 2022 respectively. As quoted in
paragraph [93] above, Mr Joubert moved from the premise that “the
point regarding
reservation, preparation and qualifying fees has
become moot’’. This appears in paragraph 4.4 of his
affidavit of 1
February 2022. This is somewhat repeated in paragraph
3.1 of his affidavit of 8 February 2022 and quoted in paragraph [94]
of this
judgment.
[97]
Of course the issue cannot be academic. First, Mr Joubert till up to
when this matter was heard
never retracted the statement that he had
reserved all 23 experts and that all of them were entitled to
reservation, preparation,
consultation and qualifying fees. The
directive for the experts to speak for themselves in this regard did
not materialise for
reasons still not confirmed by them. It must be
of concern that they would just like to abandon their fees or costs
if indeed they
were ever reserved, prepared for trial, consulted and
entitled to qualifying fees as Mr Joubert insisted. If they were
never reserved,
never consulted and prepared for trial, it should be
of a grave concern that an officer of court would assert and insist
as Mr
Joubert did in his affidavit of 24 January 2022 on something
that is not true. The only people who can clear the air, are the
experts
themselves. But, the experts also owe a duty to the court to
provide an explanation why they did not comply with the directive
issued by this court and quoted in paragraph [92] of this judgment.
If they were never informed of the directive, they should be
at
liberty to state so.
[98]
Our court orders and directives will mean nothing if they are allowed
to be ignored. For this,
I will make an order later herein in terms
of which the experts will be ordered to explain why they did not
respond to the directive
which were expected to have been brought to
their attention by Mr Joubert. It would still be necessary for them
to explain whether
or not they were so reserved, prepared for trial,
consulted and if so whether is correct that they intended to forsake
their reservation,
preparation for trial, consultation and qualifying
fees or costs as so conveyed to the court in the affidavit deposed to
by Mr
Joubert on 8 February 2021 and also as so conveyed to the court
during the hearing on 9 February 2022. They would also be required
to
explain whether the directives of this court dated 27 January 2022
were brought to their attention and why they did not take
heed
thereto. For this purpose, paragraphs [92] to [98] above read
together with the quotations in paragraphs [84] and [85] of
this
judgment, should be of help to the experts in dealing with the order
as it would appear later hereunder.
Remedy
[99]
I have already indicated in this judgment that the fee agreement
which Mr Joubert concluded with
the plaintiff is a contingency fees
agreement and that it is illegal for failure to comply with the
provisions of the Act. Failure
to comply with the provisions of
paragraphs 30, 32 and 34 of the Code of Conduct should also be
interpreted to disentitle an attorney
from levying any disbursements
he or she might have had against client unless the Legal Practice
otherwise directs in a review
process. Insofar as Mr Joubert might
have wanted to suggest that the fee agreement cannot be classified as
a contingency fees agreement,
that too cannot make it to be a legal
fee agreement for failure to enter into a proper fee agreement. Whist
section 35
of the
Legal Practice Act my
not have been proclaimed in
its entirety as yet, it is not something to ignore completely as is
in line with a well-established
practice regarding fee agreement
between client and an attorney.
[100]
Rule 8
issued in terms of section 6 of the Contingency Fee Act
provides that the provisions of these rules (referring to rules
issued
under the Act) do not derogate in any way from the power of
the Court to adjudicate upon and make orders in respect of matters
concerning the conduct of a legal practitioner. Furthermore, rule 7
of the rules in question deals with the review of agreement
or fees
in terms of section 5 of the Contingency Fee Act. The rule entitles
the Legal Practice Council or Provincial Council to
review a fee
charged to client. This then brings me to the question: What remedy
would be appropriate in the circumstances? Put
it differently, does
the invalidity of the agreement between the plaintiff and his
attorney affect the validity of the settlement
agreement between the
plaintiff and defendant in terms of which it is agreed that the
defendant is liable to the plaintiff in the
amount of R7 184 950.00
which was the result of 50/50% discounting of liability? The
agreement between the plaintiff and defendant
remains intact and the
amount has to be paid as soon as practicable. The next question is
into whose account to pay the capital
amount and under what
circumstances. The capital amount agreed upon is in respect of one
Mpho, a disabled child of the plaintiff
born on 17 February 2011. He
was diagnosed with cerebral palsy arising from partial medical
negligence during his birth.
[101]
In the draft order that was presented to be made an order of court is
stated that the capital amount should be
paid into the trust account
of the plaintiff’s attorneys. In paragraph 5 of the draft order
it is suggested that the nett
proceeds after payment of all the costs
and disbursements due to the plaintiff’s attorney, shall be
paid into a trust to
be created within twelve months of the date of
the order proposed and that the trust will be created on the basis of
the provisions
as fully set out in the draft Trust Deed attached as
“A” to the draft order. It is proposed that the trust be
authorised
to administer the net capital amount. Professional
trustees, namely, Ms Helen Rabie and Mr Jacobus P Viljoen are the
recommended
trustees to be vested with the powers, duties and
functions as set out in the draft Trust Deed attached to the draft
order.
[102]
Then in paragraph 7 of the draft order it is suggested that until
such time as the professional Trustees are able
to take control of
the capital sum and to deal with same in terms of the Trust Deed, the
plaintiff’s attorneys of record:
“
7
.1
Are authorised to invest the capital amount in an interest bearing
account with a registered
banking institution in terms of
section 86
(4) of the
Legal Practice Act to
the benefit of the child pending the
finalisation of the Trust.
7.2
Shall be prohibited from dealing with the capital in any other manner
unless
specifically authorised thereto by the court, subject to
paragraph 7.3 hereunder; and
7.3
Are authorised and ordered to make any reasonable payments to satisfy
the child’s
needs that may arise and that are required in order
to satisfy any reasonable need for treatment, care, aids or equipment
that
may arise in the interim”.
[103]
In paragraph 8 of the draft order is concluded by stating that the
appointment of the professional Trustees should
be subject to the
trustees furnishing security to the satisfaction of the Master of the
High Court and that the Trustees’
conduct should also subject
to the supervision of the Master of this Court or of the Gauteng
Provincial Division Pretoria.
[104]
I have already indicated that the fee agreement in question between
the plaintiff and her attorney is unlawful
at common law, for failure
to comply with the provisions of the
Contingency Fees Act. That
being
the case, it becomes an issue to be dealt with by the Legal Practice
Council including reviewing of fees and costs to which
the
plaintiff’s attorneys might be entitled. The agreement being
illegal, it would in the circumstances not be appropriate
to have the
capital amount paid into the trust account of the plaintiff’s
attorneys. For this purpose, the Legal Practice
Council as a
professional body will have to assist.
[105]
The interest of the child is at stake. Whilst the fee agreement
between the plaintiff and her attorney is illegal
in whatever way one
looks at it, the agreement between the plaintiff and defendant
remains intact. Therefore, the capital amount
will have to be paid
elsewhere than into the trust account of attorneys of record for the
plaintiff. The establishment of the Trust
as so proposed in the draft
order should also be pursued and for this, the Legal Practice Council
will have to assist in making
a suggestion as to in whose attorneys
trust account the capital amount should be paid. First, to take care
of the interest of the
child in question and also to invest the
capital amount or portion thereof into an interest bearing trust
account whilst waiting
for the establishment of a Trust.
[106]
Consequently an order is hereby made as follows:
106.1
The court declines to make paragraphs 1 to 4.3 of the draft
order an
order of court due to the illegality of the fee agreement concluded
between the plaintiff and her attorneys as set out
in this judgment
and due to the fact that the request to make settlement agreement an
order of court has been pre-maturely brought
for consideration
contrary to paragraph 15 of this Division’s main Practice
Directive as amended.
106.2
The Legal Practice Council is hereby directed to propose
the
attorney’s firm that can be appointed by this court for the
purpose of receiving into their trust account the sum of
R7 184
950.00 which is the subject of a settlement between the plaintiff and
defendant as indicated in this judgment.
106.3
Upon submission of the particulars of the proposed attorney’s
firm and upon appointment thereof by this court, if so satisfied, the
defendant, (MEC for Health), shall pay within 30 days the
said sum of
R7 184 950.00 into trust account of such attorneys so to be appointed
by the court.
106.4
Such attorney’s firm once appointed shall upon receipt
of the
payment of the sum of R7 184 950.00 into their trust account,
establish or create a Trust within six months from date thereof
and
once such a Trust is created, the amount so standing in attorneys
trust account to the credit of the plaintiff, shall then
be paid into
such Trust account.
106.5
The appointment of trustees of such Trust shall be made by
the Master
of the High Court of this Division on the recommendations of the
attorneys so to be appointed or as the Master may deem
fit.
106.6
The attorneys to be appointed as contemplated in this order,
shall be
entitled to propose to the Master of this Court the names of the
trustees to be appointed and such trustees shall have
the authority,
powers, duties and functions as so set out in Trust Deed to be
drafted and prepared by the attorneys appointed and
approved by this
court.
106.7
The trustees to be so appointed would be required to furnish
security, the amount of which will be determined by the Master of the
High Court.
106.8
Until the Trust is created and Trustees thereof are appointed
as
contemplated in this order, the attorneys to be appointed shall be
authorised to take control of the capital amount of R7 184
950.90 in
their trust account and deal with the amount as so contemplated and
quoted in paragraph [102] of this judgment.
106.9
Should the plaintiff’s attorneys of record wish to
recover any
fees earned or costs and disbursements incurred in the course of
litigation on behalf of the plaintiff in this matter,
they may so
approach the Legal Practice Council to review the matter regarding
fees and other costs and the Council in so reviewing
the matter,
shall also take into account the plaintiff’s right not to pay
based on the illegality of the agreement concluded
with client.
106.10
Should the Legal Practice Council find that the plaintiff’s
attorneys
of record are entitled to any reasonable fees, costs and
disbursements, same may be recovered as the Trustees of the Trust
contemplated
herein may find obliged to do so after a positive review
by the Council.
106.11
The experts identified in paragraph 3.2 of the draft order and to
whom
the email of 9 September 2021 is said to have been sent to them
notifying them of the date of trial for 22 November 2021, are hereby
ordered to file affidavits with the Registrar of this court by not
later than
16h00 on 4 April 2022
wherein they deal with the
followings:
106.11.1
Whether they were ever consulted by the plaintiff’ legal
practitioners
for trial, prepared for trial, reserved for trial and
whether they are entitled for qualifying fees as so claimed in the
draft
order discussed in this judgment and insisted on by Mr Joubert
in his affidavit deposed to on 24 January 2022.
106.11.2
Whether the questions as quoted in paragraph [84] of this judgment
were
ever brought to their attention by Mr Joubert.
106.11.3
Whether the directive as quoted in paragraph [92] of this judgment
was
ever brought to their attention by Mr Joubert and if so why they
did not comply therewith by filing affidavits as so directed by
the
court and regard should also be had to the assertions made by Mr
Joubert as quoted in paragraphs [93] and [94] of this judgment.
106.12 The
Registrar of this court is hereby directed to send a copy of this
judgment direct to the plaintiff’s experts
at the email
addresses used by the plaintiff’s attorneys as per the email of
9 September 2021.
106.13 The Legal
Practice Council is hereby directed to consider whether the conduct
of all legal practitioners for the plaintiff
in this matter have made
themselves guilty of misconduct for failure to comply with the
provisions of the
Contingency Fees Act and
also considering other
concerns raised in this judgment.
106.14 Insofar as
the MEC for Health- Mpumalanga may have an interest in this matter
including the Road Accident Fund regarding
experts’ costs and
conduct of their attorneys in easily agreeing to experts’ costs
that may not have been incurred
in medical negligence and RAF matters
generally as discussed in this judgment, the Registrar of this court
is hereby directed to
bring a copy of this judgment to the attention
of both the MEC and the Chief Executive Office of the Road Accident
Fund.
106.15 Each
party to pay its own costs regarding the proceedings of 9 February
2022.
LEGODI
JP
DATE
OF HEARING: : 09
FEBRUARY 2022
DATE
OF JUDGMENT : 17 MARCH 2022
FOR
THE PLAINTIFF: ADV.
MULLINS SC AND ADV. VENTER
INSTRUCTED
BY VZLR
INC
THE PINNACLE BUILDING
TEL: 012 435 9444
3
RD
FLOOR, 1 PARKIN STREET
MBOMBELA
REF: W LOUW
Email: willeml@vzlr.co.za
FOR
THE DEFENDANT: ADV H VAN
EEDEN SC AND ADV. C CARELSE
INSTRUCTED
BY : ADENDORFF
THERON INC
MBOMBELA
REF:
DCU RAATH / ES/C00539
TEL:
013 752 3902
Email:
dricus@adendorffs.com