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High Court spells out attorney-client billing basis

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Judge Neil Tuchten, using the Pretoria High Court, yesterday passed on an extremely important judgment confirming the only basis where your attorney may bill a plaintiff.

The case was through Cadac CEO Simon Nash with his fantastic company Midmacor Industries (Midmacor) against pension fund curator, Tony Mostert, his lawyers AL Mostert & Co, the Financial Services Board (FSB), and the Registrar of Pension Funds.

Mostert, a senior attorney practising inside financial services sector, is a curator of numerous pension funds whose surpluses ended up stripped years back when using the eponymous Ghavalas Option.

Read:?Peter Ghavalas touches down in SA

He continues to be successful in recovering nearly R1 billion for these particular pension funds.

Read:?First cash for Ghavalas pension funds

FSB contingency fee agreement

In August 2006 Mostert as well as FSB applied for a partnership whereby Mostert would use his best efforts to recover the stripped surpluses. Mostert, as curator, would instruct his law firm, AL Mostert & Co, to do most of the administrative work with earnings “contingency fee” of 33.3%. (Mostert with the exceptional firm both receiving 16.66%, excluding VAT.) The agreement contemplated that Mostert with the exceptional firm will be liable for the many expenses incurred in recovering the surpluses.

Contingency Fees Act

The Contingency Fees Act (CFA) moved into operation in 1999. It did away with all the common-law prohibition against lawyers (attorneys and advocates) taking matters on risk. Ahead of now, lawyers could only be employed by their ordinary fee. The CFA came under the legal spotlight in 2003 once the Supreme court of Appeal ruled upon it from the PwC case:

“The clear intention is usually that contingency fees be carefully controlled. The Act was enacted to legitimise contingency fee agreements between legal practitioners as well as their clients, which might otherwise be prohibited with the common law. Any contingency fee agreement between such parties is not covered by the Act thus remains illegal. What the heck is of significance, however, is always that by letting ‘no win, no fees’ agreements the legislature has created speculative litigation possible. And by permitting increased fee agreements the legislature has made it simple for legal practitioners to have section of the proceeds on the action.”

It is settled law in South Africa that your contingency fee needs to be using the ordinary fee charged by a law firm. As per the Law Society of South Africa website, the ordinary fee are very different around town as well as depend on several factors:

* ? ? ? ? ?The quantity and great need of the project done;

* ? ? ? ? ?The complexness with the matter as well as difficulty or novelty with the work as well as questions raised;

* ? ? ? ? ?The skill, labour, specialised knowledge and responsibility from the attorney;

* ? ? ? ? ?The quantity and importance of the documents prepared or perused, without necessarily having regard to length;

* ? ? ? ? ?The place where and circumstances that the services or any part thereof were rendered;

* ? ? ? ? ?Some time expended from the attorney; where money or property owner involved, its amount or value;

* ? ? ? ? ?Value of the issue towards client;

* ? ? ? ? ?The products the repair done;

* ? ? ? ? ?The experience or seniority on the attorney;

* ? ? ? ? ?Whether or not the fees and disbursements happen to be incurred or increased through over-caution, ?negligence or mistake from the member.

The fee due via the client can then basically calculated regarding documents including file notes as well as other evidence the amount of time spent with the lawyer and support staff, the sheer number of photocopies or telephone calls made.? It will have the fees paid to advocates.

The fee calculation is undertaken by the legal cost consultant who compares the lawyer’s files over the matter and itemises each attendance, message, photocopy or consultation by having an advocate.

The legal cost consultant should prepare a bill of costs for that attorney, who then presents it towards client. Should the client accepts the amount charged then indeed, this will end with the matter.?If your client is unhappy then the bill with regards to litigation must be assessed by the court clerk known as a Taxing Master.

Non-litigious matters are taxed via the local Law Society.

A Taxing Master

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