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WCLawyer
WCLawyer, Attorney
Category: South Africa Law
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Experience:  L.LB (UOVS)
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what exactly does the following phrase mean "in the event that

Resolved Question:

what exactly does the following phrase mean "in the event that the costs are awarded in favour of the client, (lawyers name) shall tax the bill of costs for his own account"
Submitted: 1 year ago.
Category: South Africa Law
Expert:  WCLawyer replied 1 year ago.
Good day.

This is an info request to assist you better. Please continue on this thread.

Can you provide context?
Customer: replied 1 year ago.

Its part of a fees agreement, which I dont fully understand. The lawyer in question explained it to me when i signed it, but now is reneging on what he explained and saying that it means something else. Herewith the agreement, i need to know what exactly it means:


"WHEREAS (lawyer) and the client wishes to enter into a fee agreement. This fee agreement is not a new agreement but seeks to state the agreement which the parties have entered into in relation to a labour court matter XXXXX. The parties agreed to the following:




  1. SUCCESSFUL



1.1. In the event that the client is successful with the matter at the labour court,she agrees to pay (lawyer name) 30% of the compensation awarded to her.



1.2. The 30% shall be calculated on the gross amount awarded to her before tax.



In the event that the costs are awarded in favour of the client (lawyer name) shall tax the bill of costs for his own account."


 


According to the verbal agreement we had, and what he explained this means was that on the total award (including costs) he would take 30% as a fee, and that the taxing of the bill was purely to ascertain what the bill amout would be. Now he is saying that this document i signed means that he takes 30% of total award PLUS costs that were awarded.


 


I am feeling duped and mired by legal jargon and need help please.

Expert:  WCLawyer replied 1 year ago.
Report the attorney at the Law Society. This is a contingency agreement, but it is illegal.

Section 2 of the Contingency Fees Act says the following:

2. Contingency fees agreements.—(1) Notwithstanding anything to the contrary in any law or the common law, a 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 be entitled to fees equal to or, subject to subsection (2), higher than his or her normal fees, set out in such agreement, for any such services rendered, if such client is successful in such proceedings to the extent set out in such agreement.
(2) 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 per cent: 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 per cent of the total amount awarded or any amount obtained by the client in consequence of the proceedings concerned, which amount shall not, for purposes of calculating such excess, include any costs.

What this basically means is that, if an attorney concludes a contingency agreement with a client, the attorney may not charge more than 25% of the claim amount, or more than twice his normal fee, whichever is the lesser.

Clearly, if he claims 30% of the winnings plus the taxed bill, he is overreaching you and he is then, not only in contravention of the Act, but also the Law Society Rules.

Note that expenses incurred by the attorney in driving the matter is excluded from fees. and can be collected to reimburse the attorney.

I hope this answers your question, but if you have any further questions, feel free to ask them before you rate. It will not cost you anything extra. If you are satisfied with the answer, kindly click on one of the five faces on the ratings page. I don't get anything for this answer unless you do.



Customer: replied 1 year ago.

Please substantiate:


Note that expenses incurred by the attorney in driving the matter is excluded from fees. and can be collected to reimburse the attorney.

Expert:  WCLawyer replied 1 year ago.
We distinguish between two major items on an attorneys account. The first being fees, which is what the attorney is entitled to for his work. In other words, this is what you pay the attorney to do the work for you or should pay the attorney for the work he has done.

The second item is expenses. This is money that it paid out of the practice on behalf of the client to further the clients' case. This would typically include advocate's fees, sheriff's fees, the costs of experts and things like this.

So, since the attorney has incurred those expenses to further the matter, he should be entitled to claim it back. Now, normally, when a cost order is awarded against the opposition, they are liable for those expenses. So, what will happen is that the attorney will collect those expenses from the opposition. Sometimes this is not possible (because the defendant doesn't have the funds or whatever) and he can then collect it from the client.

If the client has paid the expenses, however, the attorney is not allowed to keep any amount collected towards the expenses for himself and must pay this over to the client.

For example:

Say he has levied fees of R 10 000 and incurred expenses in the amount of R 10 000. He has paid the expenses. He now collects R 15 000 from the defendant. The amount is always allocated towards fees, then expenses and then interest and capital. So, he would be entitled to claim the R 5 000 costs from you.

After you paid it, he now manages to collect it from the defendant. He then has to pay you the R 5 000 you paid him back.

Customer: replied 1 year ago.


ok, this bill has been "taxed" at the labour court and i have the revised bill, ie what his original charge was vs. what the taxed bill is done by cost consultants and agreed to be the labour court. So what does that cover exactly?

Expert:  WCLawyer replied 1 year ago.
A Taxed bill of costs is what a successful party is legally entitled to claim from the unsuccessful party in terms of the Rules of the relevant Court.

This has nothing to do with what you owe your attorney. It says what the person you took action against is liable to pay back to you in terms of legal fees and expenses.

How it normally works is, you pay your attorney and if the matter is finalized and you have paid everything and the attorney collected what is due to you, he would pay you the capital sum you claimed for, plus the interest you are entitled to (if any) plus the legal fees contained in the taxed bill of costs. If you paid more in legal fees than what is contained in the taxed bill, you would be out of pocket in that amount.

In this instance, however, where you paid no legal costs, the attorney will retain the amount collected in terms of the bill of cost and play it off against the fees that you are liable for in terms of the contingency agreement.

Say you claimed R 100 000. The bill is taxed at R 10 000 and the defendant pays the R 110 000, then the attorney will subtract R 25 000 from that R 110 000 (his contingency fee at 25%) and pay you the balance in satisfaction of your claim.
Customer: replied 1 year ago.

But im still confused:


 


Does the section in the agreement, "In the event that the costs are awarded in favour of the client (lawyer name) shall tax the bill of costs for his own account" mean that i am liable to pay his account, or the taxed bill? Or am i supposed to pay for the difference between the two? Even though we supposedly have a contingency fee agreement??


 


I have a meeting with him next week and he is going to talk me in circles again

Expert:  WCLawyer replied 1 year ago.
The agreement does not matter and, consequently, neither does the meaning of the clause. Because this agreement transgresses the Contingency Fees Act, that clause cannot be enforced. The Act does not allow him to charge 30% of your winnings, plus the taxed costs (which is what that clause, on face value, implies). The Act only allows him to charge twice his normal fee or 25% of your winnings, whichever is the lesser amount.

So, when you have a meeting with him next week, tell him that you have obtained legal advice, that the extent of this advice is that the contingency agreement is invalid because it imposes obligation on you that is in contravention with section 2 of the Act and that you have decided to refer the matter to the Law Society for a determination. Then, refer the matter to the law society so that they can deal with him further and make sure that you get what is due to you and he gets what is due to him.

So, in summary: the agreement is invalid because it is illegal. What the clause means, is therefore moot.
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 15000
Experience: L.LB (UOVS)
WCLawyer and other South Africa Law Specialists are ready to help you
Customer: replied 1 year ago.


you have been EXCEPTIONALLY helpful, thank you SO much.

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