ATTORNEYS PRACTICE 15 MARCH 2023
QUESTIONS AND ANSWERS
QUESTION 1 [35]
During a consultation with your client Mrs Gold, who is married out of community of
property with the accrual system, you are instructed to lodge a claim for injuries that
she had sustained as a result of a motor vehicle accident on Christmas Eve. She
was a passenger in the vehicle driven by her sister. You establish that Mrs Gold has
good prospects of success and are willing to lodge the claim. She indicates that her
husband had recently lost his job, and that she is the sole breadwinner of her family.
Hence, she does not have the funds to pay you for your services but is willing to pay
you when she gets paid from the proceeds of the matter.
1.1. What sort of agreement will you conclude with her in order to facilitate the
above?
ANSWER:
A Contingency Fee Agreement in terms of the Contingency Fees Act 66
of 1997.
1.2. Explain what this agreement entails.
ANSWER:
The agreement permits a legal practitioner to defer payment of
professional fees until the successful conclusion of the matter. Should
the client be unsuccessful, the attorney will generally not be entitled to
recover professional fees from the client (subject to the terms of the
agreement). Should the client succeed, the attorney becomes entitled to
charge either:
• the normal taxed or agreed fee together with an agreed success
fee; or
, • a success fee not exceeding the statutory limits prescribed by the
Act.
The agreement must be reduced to writing and must comply with all the
formalities prescribed by the Act.
1.3. You are successful in the matter. The Court grants apportionment of damages
wherein Mrs Gold’s claim succeeds as follows: R325 000.00 for special
damages; R250 000.00 for general damages. Upon drawing up your bill of
costs for Mrs Gold, you note that your fees are R65 000.00.
1.3.1. What fee will you be entitled to, if you had an agreement in terms of Question
1.1 above?
ANSWER:-
• Mrs Gold recovered:
• Special damages:
R325 000
• General damages:
R250 000
• Total award:
R575 000
• Ordinary fees:
R65 000
• In terms of section 2 of the Contingency Fees Act:
• The success fee may not exceed:
• 100% of the attorney's normal fees, and
• 25% of the total amount awarded (excluding costs)
• Whichever amount is lower applies.
• Calculate:
• Ordinary fee:
R65 000
QUESTIONS AND ANSWERS
QUESTION 1 [35]
During a consultation with your client Mrs Gold, who is married out of community of
property with the accrual system, you are instructed to lodge a claim for injuries that
she had sustained as a result of a motor vehicle accident on Christmas Eve. She
was a passenger in the vehicle driven by her sister. You establish that Mrs Gold has
good prospects of success and are willing to lodge the claim. She indicates that her
husband had recently lost his job, and that she is the sole breadwinner of her family.
Hence, she does not have the funds to pay you for your services but is willing to pay
you when she gets paid from the proceeds of the matter.
1.1. What sort of agreement will you conclude with her in order to facilitate the
above?
ANSWER:
A Contingency Fee Agreement in terms of the Contingency Fees Act 66
of 1997.
1.2. Explain what this agreement entails.
ANSWER:
The agreement permits a legal practitioner to defer payment of
professional fees until the successful conclusion of the matter. Should
the client be unsuccessful, the attorney will generally not be entitled to
recover professional fees from the client (subject to the terms of the
agreement). Should the client succeed, the attorney becomes entitled to
charge either:
• the normal taxed or agreed fee together with an agreed success
fee; or
, • a success fee not exceeding the statutory limits prescribed by the
Act.
The agreement must be reduced to writing and must comply with all the
formalities prescribed by the Act.
1.3. You are successful in the matter. The Court grants apportionment of damages
wherein Mrs Gold’s claim succeeds as follows: R325 000.00 for special
damages; R250 000.00 for general damages. Upon drawing up your bill of
costs for Mrs Gold, you note that your fees are R65 000.00.
1.3.1. What fee will you be entitled to, if you had an agreement in terms of Question
1.1 above?
ANSWER:-
• Mrs Gold recovered:
• Special damages:
R325 000
• General damages:
R250 000
• Total award:
R575 000
• Ordinary fees:
R65 000
• In terms of section 2 of the Contingency Fees Act:
• The success fee may not exceed:
• 100% of the attorney's normal fees, and
• 25% of the total amount awarded (excluding costs)
• Whichever amount is lower applies.
• Calculate:
• Ordinary fee:
R65 000
