LEGAL COSTS
THE CONTENT OF A FEE AGREEMENT, INCLUDING THE STRUCTURE, THE
TARIFFS, AN EXPLANATION OF THE VARIOUS FEE SCALES AS WELL AS
WHEN AND HOW APPLICABLE
Structure of the Agreement
Parties Involved: Names of the attorney/law firm and the client.
Scope of Work: Description of the legal services to be provided.
Duration: Timeline for the services, if applicable.
Payment Terms: When payments are due (e.g., upfront, in installments, upon
completion).
It is important that the attorney advises the client of the financial implications and
risks of costs.
the fee agreement with the client be in writing, whether incorporated in the mandate,
application for credit facilities or in a separate fee agreement.
Tariffs and Fee Structures
Legal fees can be structured in different ways, depending on the nature of the case and
the agreement between the attorney and the client. Common structures include:
Hourly Rate: The attorney charges a set rate per hour of work.
Fixed Fee: A predetermined amount for specific services (e.g., drafting a contract,
filing a divorce).
Contingency Fee: The lawyer only gets paid if they win the case, typically taking a
percentage of the settlement (common in personal injury cases).
Retainer Fee: A client pays an upfront amount, which the lawyer deducts from as work
progresses.
Statutory Fees: Fees set by law, usually for government-related legal processes.
EXPLANATION OF FEE SCALES
High Court vs. Magistrate’s Court Fees: Different courts may have different fee
structures.
Senior vs. Junior Attorney Fees: More experienced attorneys may charge higher rates.
Disbursements: Additional costs like court filing fees, expert witness fees, and travel
expenses.
Party and Party Costs
This is the default scale for legal cost recovery in litigation unless specified otherwise.
Covers only reasonable costs incurred by the winning party in a lawsuit.
The losing party pays these costs, but they do not cover all legal expenses—only
necessary and fair costs as determined by the taxing master.
Example: If you win a lawsuit, the opposing party may be ordered to pay your legal
costs, but you might still owe your attorney the difference between what was
recovered and the actual bill.
,Attorney and Client Costs
Higher than party and party costs but lower than attorney and own client costs.
Covers more than just necessary legal work—it includes expenses agreed upon
between the client and attorney.
Typically applicable when:
A contract explicitly states that costs are payable on this scale.
A court orders a party to pay on this scale as a punitive measure (e.g., for
misconduct in litigation).
Example: If a contract states that a defaulting party must pay legal costs on an
attorney and client scale, they will be liable for most of the winning party’s legal
expenses, not just the bare minimum.
Attorney and Own Client Costs
The highest scale of legal fees, covering all costs agreed upon between the attorney
and client.
Always applicable when billing a client directly, provided there is a written mandate
or tacit agreement between the attorney and the client.
These costs are not usually recoverable from an opposing party unless explicitly
agreed upon in a contract.
Example: If you sign an agreement with your attorney that specifies an attorney and
own client scale, you are responsible for all legal costs, regardless of what a court
may order the opposing party to pay.
When and How Fees are Applicable
Upfront Payment vs. Payment on Completion: Some legal matters require full
payment in advance, while others allow payment upon completion.
Billing Cycle: Monthly invoices, milestone-based billing, or lump sum payments.
Fee Adjustments: Whether the attorney can change the fees and under what
circumstances.
Refund Policies: If any part of the retainer is refundable if the services are not fully
rendered.
, DIFFERENT TYPES OF FEE AGREEMENTS (INCLUDING CONTINGENCY FEE
AGREEMENTS AND LITIGATION FUNDING AGREEMENTS)
Hourly Fee Agreement
The attorney charges a fixed hourly rate for their services.
Clients are billed for the time spent on their case, usually in increments (e.g., 6-
minute or 15-minute blocks).
Common in corporate, commercial, and family law matters.
Example: "Attorney charges R2,500 per hour for consultation, research, and court
appearances."
Fixed Fee Agreement (Flat Fee Agreement)
The attorney charges a predetermined amount for specific legal services.
Ideal for routine legal work such as drafting contracts, wills, uncontested divorces, or
real estate transactions.
Provides cost certainty for clients.
Example: "A law firm charges R10,000 for drafting a standard commercial lease
agreement."
Retainer Fee Agreement
The client pays an upfront fee, which the lawyer draws from as they work on the case.
Can be either non-refundable (general retainer) or refundable (advance payment
retainer) if unused.
Often used by businesses and individuals who require ongoing legal assistance.
Example: "A company pays R50,000 monthly to retain a legal advisor for ongoing
legal support."
Litigation Funding Agreement (Third-Party Funding)
A third-party funder (not the client or attorney) provides financial support for
litigation in exchange for a portion of the winnings if the case succeeds.
Used in high-cost cases such as commercial litigation, class actions, and arbitration.
The funder covers expenses like legal fees, expert witnesses, and court costs.
If the case is unsuccessful, the client typically owes nothing.
Example: "A corporate plaintiff receives R1 million from a litigation funder to pursue a
breach of contract lawsuit, agreeing to repay 30% of any award received."
Statutory or Regulated Fees
Certain legal services have fees set by law, such as court filing fees or legal aid rates.
These fees apply to government-related legal processes or publicly funded legal
assistance.
Example: "Legal Aid South Africa provides free or subsidized legal services based on a
set fee structure for qualifying individuals."
THE CONTENT OF A FEE AGREEMENT, INCLUDING THE STRUCTURE, THE
TARIFFS, AN EXPLANATION OF THE VARIOUS FEE SCALES AS WELL AS
WHEN AND HOW APPLICABLE
Structure of the Agreement
Parties Involved: Names of the attorney/law firm and the client.
Scope of Work: Description of the legal services to be provided.
Duration: Timeline for the services, if applicable.
Payment Terms: When payments are due (e.g., upfront, in installments, upon
completion).
It is important that the attorney advises the client of the financial implications and
risks of costs.
the fee agreement with the client be in writing, whether incorporated in the mandate,
application for credit facilities or in a separate fee agreement.
Tariffs and Fee Structures
Legal fees can be structured in different ways, depending on the nature of the case and
the agreement between the attorney and the client. Common structures include:
Hourly Rate: The attorney charges a set rate per hour of work.
Fixed Fee: A predetermined amount for specific services (e.g., drafting a contract,
filing a divorce).
Contingency Fee: The lawyer only gets paid if they win the case, typically taking a
percentage of the settlement (common in personal injury cases).
Retainer Fee: A client pays an upfront amount, which the lawyer deducts from as work
progresses.
Statutory Fees: Fees set by law, usually for government-related legal processes.
EXPLANATION OF FEE SCALES
High Court vs. Magistrate’s Court Fees: Different courts may have different fee
structures.
Senior vs. Junior Attorney Fees: More experienced attorneys may charge higher rates.
Disbursements: Additional costs like court filing fees, expert witness fees, and travel
expenses.
Party and Party Costs
This is the default scale for legal cost recovery in litigation unless specified otherwise.
Covers only reasonable costs incurred by the winning party in a lawsuit.
The losing party pays these costs, but they do not cover all legal expenses—only
necessary and fair costs as determined by the taxing master.
Example: If you win a lawsuit, the opposing party may be ordered to pay your legal
costs, but you might still owe your attorney the difference between what was
recovered and the actual bill.
,Attorney and Client Costs
Higher than party and party costs but lower than attorney and own client costs.
Covers more than just necessary legal work—it includes expenses agreed upon
between the client and attorney.
Typically applicable when:
A contract explicitly states that costs are payable on this scale.
A court orders a party to pay on this scale as a punitive measure (e.g., for
misconduct in litigation).
Example: If a contract states that a defaulting party must pay legal costs on an
attorney and client scale, they will be liable for most of the winning party’s legal
expenses, not just the bare minimum.
Attorney and Own Client Costs
The highest scale of legal fees, covering all costs agreed upon between the attorney
and client.
Always applicable when billing a client directly, provided there is a written mandate
or tacit agreement between the attorney and the client.
These costs are not usually recoverable from an opposing party unless explicitly
agreed upon in a contract.
Example: If you sign an agreement with your attorney that specifies an attorney and
own client scale, you are responsible for all legal costs, regardless of what a court
may order the opposing party to pay.
When and How Fees are Applicable
Upfront Payment vs. Payment on Completion: Some legal matters require full
payment in advance, while others allow payment upon completion.
Billing Cycle: Monthly invoices, milestone-based billing, or lump sum payments.
Fee Adjustments: Whether the attorney can change the fees and under what
circumstances.
Refund Policies: If any part of the retainer is refundable if the services are not fully
rendered.
, DIFFERENT TYPES OF FEE AGREEMENTS (INCLUDING CONTINGENCY FEE
AGREEMENTS AND LITIGATION FUNDING AGREEMENTS)
Hourly Fee Agreement
The attorney charges a fixed hourly rate for their services.
Clients are billed for the time spent on their case, usually in increments (e.g., 6-
minute or 15-minute blocks).
Common in corporate, commercial, and family law matters.
Example: "Attorney charges R2,500 per hour for consultation, research, and court
appearances."
Fixed Fee Agreement (Flat Fee Agreement)
The attorney charges a predetermined amount for specific legal services.
Ideal for routine legal work such as drafting contracts, wills, uncontested divorces, or
real estate transactions.
Provides cost certainty for clients.
Example: "A law firm charges R10,000 for drafting a standard commercial lease
agreement."
Retainer Fee Agreement
The client pays an upfront fee, which the lawyer draws from as they work on the case.
Can be either non-refundable (general retainer) or refundable (advance payment
retainer) if unused.
Often used by businesses and individuals who require ongoing legal assistance.
Example: "A company pays R50,000 monthly to retain a legal advisor for ongoing
legal support."
Litigation Funding Agreement (Third-Party Funding)
A third-party funder (not the client or attorney) provides financial support for
litigation in exchange for a portion of the winnings if the case succeeds.
Used in high-cost cases such as commercial litigation, class actions, and arbitration.
The funder covers expenses like legal fees, expert witnesses, and court costs.
If the case is unsuccessful, the client typically owes nothing.
Example: "A corporate plaintiff receives R1 million from a litigation funder to pursue a
breach of contract lawsuit, agreeing to repay 30% of any award received."
Statutory or Regulated Fees
Certain legal services have fees set by law, such as court filing fees or legal aid rates.
These fees apply to government-related legal processes or publicly funded legal
assistance.
Example: "Legal Aid South Africa provides free or subsidized legal services based on a
set fee structure for qualifying individuals."
