In the realm of law, South Africa offers a diverse and dynamic legal landscape. Whether you are embroiled in a family or civil dispute, or a defendant facing criminal charges, understanding legal costs is vital. Common questions about legal costs include:
- What should I pay my legal representative?
- Will I recover my legal costs if I win my case?
- Will the type of court that hears my case have an effect on my legal costs?
- What are the different types of costs?
We know the importance of transparent communication about legal expenses. In this article, we will shed light on the various aspects of legal costs in South Africa, empowering you to make informed decisions about your legal representation.
How and what legal costs should I pay my legal representative?
In terms of Rule 28 of the Rules for the Attorneys’ Profession, a legal practitioner is entitled to a reasonable fee for professional services rendered. Legal costs are mainly determined by the fee structures which are normally agreed upon between the client and the law firm.
There are three common types of fee structures:
a) Hourly Rates: In this model, clients are billed based on the number of hours the lawyer or attorney spends on their case. Hourly rates may vary depending on the experience and expertise of the legal professional involved.
b) Contingency Fees: Certain cases, particularly personal injury, and medical malpractice claims may be handled on a contingency fee basis. Here, the attorney’s fees are contingent upon the case’s successful outcome, typically a percentage of the final settlement or award.
c) Fixed Fees: This model is the one most used by attorneys. Law firms offer fixed fee tariffs for work that is being done. This option provides clients with more certainty about their legal expenses.
Whichever fee structure is agreed upon between the client and the law firm, it is essential that the fees rendered are reasonable. In Coetzee v Taxing Master, South Gauteng High Court and Another (2010/14197) [2012] ZAGPJHC 175; 2013 (1) SA 74 (GSJ) (19 September 2012), the court held that
“The payment by a client to the client’s own attorney is not aimed at a ‘full indemnity’, but rather is aimed at the payment of a reasonable recompense for services rendered.
When exercising the discretion to determine a reasonable rate for services rendered the law firm must consider the following:
- Fees charged by other legal practitioners,
- The seniority of the attorney
- The time it has taken to do the work
- The nature of the work performed”
Will I recover my legal costs if I win my case?
Usually, a South African Court will order the losing party in a case to pay the legal costs of the winning party. It is, however, important to note that this might not include the winning party’s full costs.
The costs that can be recovered are in accordance with a legally fixed tariff schedule. This schedule will differ depending on which type of court hears your case.
It is important to point out that the ability to successfully recover legal costs from the losing party further depends on the ability of the losing party to settle costs. In the event that the losing party is “a man of straw”, the ability to recover costs will be limited
Will the type of court that hears my case have an effect on my legal costs?
Cases move from a Magistrate’s Court to a High Court if the monetary value of a claim goes over R400 000. However, certain types of cases, such as criminal cases that have to do with rape, treason, or murder, are heard by a High Court only.
The Rules of Court regulate the tariffs that are applied by the Magistrates’ Courts and High Courts.
Magistrate Court tariffs are charged in terms of one of four scales (namely Scale A through to Scale D). These scales are based on the value of the claim. Scale A allows the lowest, and Scale D the highest, proportion of legal costs to be recovered.
In High Courts, costs awarded usually will include advocates’ fees. In Magistrates’ Courts, advocate fees aren’t recoverable unless specifically ordered otherwise.
The different types of costs
There are three types of legal costs that a Court can order an unsuccessful party in a matter to pay:
Party and party costs
Party and party costs are the costs most frequently awarded in court cases. Party and party costs are the legal costs that a court may order the losing party to pay to the winning party.
These costs can be seen as the costs that have been incurred during the course of the legal proceedings. They are specific to the particular court case.
These costs do not include legal costs that were incurred before a Summons or Notice of Motion was issued and served.
Party and party costs also do not include costs relating to attendance between the client and their attorney. For example, they do not include charges for communicating with the client, however, they do include the attorney’s charges for communicating with the other party’s attorney.
Attorney and client costs
Attorney and client costs mean that the winning party will be awarded party and party costs plus other costs. This includes charges for attendances between you and your attorney.
In South Africa, the Courts very seldomly award attorney and client costs, or a portion of these costs. The situations where it does happen, it could be because:
- there is a specific term in a contract that attorney and client costs would be payable in the event of such a dispute
- a Court believes that a litigant’s conduct in the course of the litigation has been such that a punitive costs order is warranted.
Where attorney and client costs are awarded, the costs are subject to the same tariffs as party and party costs.
Attorney and “own” client costs
A third category of legal costs in South Africa is the so-called attorney and “own” client costs, these costs are almost never awarded by a court.
These are the actual fees payable by a client to an attorney, in terms of their agreed fee structure (which is not restricted to the statutory Magistrates and High Court tariffs).
If a Court does award Attorney and “own” client costs, it is usually due to the court strongly disapproving of the conduct of the losing party.
Taxation of Legal Costs
After the winning party has been awarded legal costs, a Bill of Costs has to be prepared, this is usually done by a cost consultant. The Bill of Costs will then be served on the losing party and forwarded to the Taxing Master, who is an officer of the Court.
A process called “taxation” will then happen wherein the Taxing Master will then decide which costs are recoverable, and payable by to the winning party by the losing party.
After taxation, the Taxing Master will sign and stamp a certificate which is known as an “allocator”, this certificate can be used to enforce the payment of legal costs by the losing party.
Contact Us
Navigating legal costs in South Africa can be a complex process that can leave you with more questions than answers. However, with the right information and guidance, you can make well-informed decisions about your legal representation.
We believe in fostering open communication with our clients, ensuring they understand the costs involved in their legal matters. Should you require expert legal advice, our team of seasoned professionals is ready to provide you with dedicated and transparent representation?
Please note that the information provided in this blog post is general in nature and should not be construed as legal advice. For specific legal guidance, we encourage you to reach out to our team of experienced attorneys.
