Letters to the Lawyer

What is Legal insurance cover?

As we all know, legal costs and representation can come with a hefty price. Therefore, you most probably have heard about the term Legal insurance. Much like a medical aid and car insurance, you can also get your business legal insurance. This is highly recommended for business who work with high risk activities, but this cover does not only apply for companies. Usually most of your business insurance policies has legal cover included. Most separate legal insurance companies are targeted towards individuals. You as a person can get legal insurance for basically anything that needs an Attorney. From Personal injury claims to divorces, Legal insurance will cover between most and all your legal expenses incurred.

ACT Solutions PTA Inc. (T) 012 329 0133 

How are legal costs regulated?

Legal costs that may be recovered from other parties in legal matters in South Africa is regulated by tariffs prescribed by law.  These magistrate’s and high court rates are revised and published periodically.  Legal fees that practitioners may charge clients are however not overly regulated.  Legal practitioners can set their own fees and clients will either agree to pay said fees or search for someone more appropriately priced.  Some regulation exists in the form of contingency fees legislation that limits the percentage that a legal practitioner may retain if work is undertaken on a contingency (success) fee basis.  “Reasonableness” seems to be the measure when determining the appropriateness of the fees levied by a practitioner.  When costs are awarded against a party in litigation matters, a bill of costs is drafted and taxed to ensure costs recovered are allowed and are levied on the applicable scale.  A taxing master may allow a lesser amount if a fee seems unreasonable or disproportionally high.  The client will however still have to pay his legal representative the fee that was agreed between them.  If a client is confronted with legal fees that he believes are unreasonable he may approach the Legal Practice Council (“LPC”) with a complaint and a ruling may be issued by the LPC.

A Google survey claims that 21.72% of practitioners surveyed charge between R1 000 and R1 500 per hour, 39.70% between R1 500 and R2 000 per hour and 11.24% more than R2000.  Senior and specialised practitioners’ fees will seldom be less than R2 000 per hour.

Willem Jacobs
Cell : +27 (0)83 253 8115     e-mail: wmj@iafrica.com