The Committee met for further consideration of the Legal Practice Bill, draft 5. The Chairperson announced that on the previous day, the DA had made a strong plea that the document prepared by the Committee Content Adviser summarising aspects of the Australian system, particularly in regard to fees, should be given serious consideration and that the Committee should consider incorporating provisions that required legal practitioners to disclose costs to their clients in advance of the work done. The Department of Justice and Constitutional Development noted that although this document dealt in detail with fee regimes, it would be possible to simplify it and cover, for instance, the need for written fee agreements between practitioner and client, likely court costs, and inform clients of their right to negotiate. A DA Member added that it was desirable that regular updates also be given. The ACDP believed these suggestions would go far to address consumer concerns, but wanted to distinguish this arrangement from common law contingency fee agreements. The COPE representative also supported such an arrangement but noted that clients should also be made aware that fees could adjust according to seniority. The ANC requested further time to consider the matter. The Chairperson asked the Department, in the meantime, to work on a proposed clause.
Members briefly discussed a letter from the Minister of Trade and Industry, which had asked the Committee to ensure that nothing in the Bill was in conflict with South Africa’s obligations under the General Agreement on Tariffs and Trade. Members thought that the position was already covered in general under clause 24(3), and suggested that it was possible to add a further safeguard, but it was agreed that the drafters from the Department of Justice and Constitutional Development, and Trade and Industry, should meet to finalise the wording.
An ANC Member noted that draft 5, the latest version of the Legal Practice Bill, was quite complex and requested time to consider and discuss the various options in depth, so that when the Committee was making its final decisions on the clause-by-clause deliberations, it would be able to move faster. Other parties agreed, and it was decided to adjourn this meeting and resume deliberations after the following week.
Legal Practice Bill: Draft 5 deliberations
The Chairperson summarised that on the previous day, Ms Smuts had asked that the drafters receive the document from the researchers relating to the Australian system on fees. Personally, he thought it an excellent document. The ANC had taken a position on fees, and would speak to that later. However, he thought that when the Legal Practice Council (LPC) conducted its inquiry into fees, it should consider that model, because it addressed many of the concerns discussed on the previous day. A recommendation to this effect could be included in the Committee report.
Ms M Smuts (DA) thanked the Chairperson for reporting back. One problem, should the ANC not accept the suggestions, would be that the opportunity would have been lost for the Bill to offer immediate recourse to consumers of legal services, and to address the known problems with legal costs. She asked if Mr Daya could be permitted to present what he had discussed with Ms Smuts that morning. The research document was highly detailed, and Mr Daya had suggested that perhaps a more simplified form of costs disclosure could be established, to take effect immediately. She reminded Members that the LPC’s inquiry would of course take time; it would take two years before the Council itself was established, and quite some time after that to report back.
Mr Raj Daya, Acting Deputy Director General: Legislative Development, Department of Justice and Constitutional Development, said that the document presented was very detailed and dealt with all aspects of the fee regime, including even the issue of dispute resolution, covering also a number of eventualities. What Ms Smuts was essentially proposing was that a written fee agreement must be entered into between every legal practitioner and his/her client. That would cover the hourly rate. He reminded Members that because fixed tariffs had been found not competitive, this meant that everything was negotiable. The legal practitioner must tell the client what the hourly fee rate would be. Secondly, the legal practitioner should give an estimate to the client of the full legal costs. He took the point raised by Mr Swart on the previous day that it was difficult to put a final figure on legal proceedings, but noted that legal practitioners were trained to understand the court process, and would be able to suggest likely costs for a number of options. The third aspect was that clients should be informed of their rights to negotiate a cost arrangement with the law practice. No member of the public should be under the perception that s/he would not have a right to negotiate, so that should be captured in a written agreement.
Mr S Swart (ACDP) believed that these suggestions would go very far to address consumers’ concerns. He liked the idea that the client would be able to negotiate. However, he wanted to distinguish the kinds of common law agreements that were being made in personal accident cases, where, under a contingency fee arrangement, it had happened that an attorney might persuade a client to enter into an agreement for fees in excess of reasonable litigation costs. Something similar was before the Courts at the moment. The laudable aims of the written fee agreement should not be undermined by unacceptable common law agreements.
Ms L Adams (COPE) was in full agreement on the written fee agreement. She noted that there were different levels of seniority and that would make a difference to the fees and this too should be clearly explained to clients, so they were aware of their options to hire practitioners who best suited their financial circumstances.
Mr J Sibanyoni (ANC) said that the arguments were persuasive. However, he requested that no decision should be taken on this today. The ANC Members would need to apply their minds to the matter. This was a new suggestion and it would be necessary to reflect and deliberate further.
The Chairperson received confirmation from Members that in the meantime, the legal drafters could be asked to prepare wording for consideration.
Ms Smuts thanked the Chairperson for that, and was delighted that the ANC was now willing to look at a draft. This would make a real difference for South Africans, if adopted, and the DA believed it was something that needed to be done, and done urgently.
Ms D Schäfer (DA) mentioned that the need for regular fee updates from practitioner to client needed to be incorporated as well.
South Africa’s commitment in terms of legal services under General Agreement on Tariffs and Trade: Letter from Minister of Trade and Industry
The Chairperson noted a letter written from the Minister of Trade and Industry, Dr Rob Davies, expressing concern that South Africa’s commitments under the General Agreement on Tariffs and Trade (GATT) should be respected.
Mr Daya noted that this concern related to clause 24(3). The letter from Minister Davies noted that the discretion of the Minister must be aligned with the world trade obligations by setting guidelines. He suggested that the start of that clause could including a phrase along the lines of “having due regard to any WTO obligations of the Republic”.
Mr Lawrence Bassett, Deputy Chief State Law Adviser, Department of Justice and Constitutional Development, said that Minister Davies had asked for a meeting with the technical officials from his Department, and he suggested that, with the permission of the Committee, he should arrange to meet them and finalise acceptable wording.
The Chairperson asked Mr Bassett to arrange a meeting as suggested. The Chairperson would acknowledge the letter from Dr Davies and indicate that a meeting would be arranged between officials from the two departments.
Mr Swart noted Mr Daya’s suggestion but commented that clause 24(3)(b) could also be adjusted; it already mentioned giving effect to reciprocal international agreements, and perhaps it was also possible to add in “including any WTO agreements” under that clause.
Ms Smuts said that an issue previously discussed was whether the Minister should be required to act “ in consultation”. She and Mr Swart were concerned about that, and had already requested a change to “after consultation”. She noted that clause 34(4) still needed to be resolved.
The Chairperson asked that this stand over to later.
Mr Sibanyoni said he wanted to make a proposal that further time be given to Members to study the various options in draft 5, to enable the Committee to move faster when it came to the clause-by-clause deliberations on the Bill.
Ms Smuts was in favour of this proposal. She would have thought that the ANC would have been familiar with provisions and options, but accepted the proposition not to proceed, otherwise time would be wasted on going through every option. She expressed the hope that the ANC would be able to move fast when the Committee did consider this again.
The Chairperson said, for the record, that the ANC did fully understand all the options in the 5th draft, and ANC Members would be ready to proceed after the following week.
Mr Swart agreed that it was not easy to follow the 5th draft, with its numerous options. He pleaded with the ANC to be mindful of the concerns he had expressed about the role of the executive. He stressed that there were no concerns about the present Minister, but it was necessary to consider sufficient checks and balances for the long term.
Mr Sibanyoni noted that in the next week the Committee would be dealing with the Budgetary Review and Recommendation Reports, and he noted also that the Judicial Service Commission was sitting.
Mr Swart commented that questions had been asked as to why the Legal Practice Bill was taking so long, but wanted to point out that the Committee had actually been dealing with this only in this year.
The Chairperson agreed, but he also said that his own feeling, when approached earlier, were that the GCB did not need to be given more time; he did not agree with their suggestion that every single member of the GCB would have to agree on the proposals.
Ms Smuts said that the profession could not be expected to agree to its own destruction as set out in previous drafts.
Mr Sibanyoni pointed out that MPs were constantly being approached with requests as to why the Bill was not yet passed.
Ms Smuts said that there was another view that the Bill should not be passed, and she had received representations to that effect.
The meeting was adjourned.
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