ATTORNEYS AMENDMENT DRAFT BILL
To amend the Attorneys Act, 1979, so as to permit the recovery of costs due to successful litigants who are clients of law clinics, and cession of such costs to law clinics; and to provide for matters connected therewith.
Be it enacted by the Parliament of the Republic of South Africa, as follows :-
Amendment of section 1 of Act 53 of 1979
1. Section 1 of the Attorneys Act, 1979 is hereby amended -
by the substitution for the definition of "law clinic" of the following :
"‘law clinic’ means a centre for the practical legal education of students in the faculty of law at a university in the Republic, and includes a law centre controlled by or which is a non-profit making organisation which provides legal services to the public free of charge, subject to the provisions of section X;".
Insertion of section X in Act 53 of 1979
2. The following section is hereby inserted after section _______ of the Attorneys Act, 1979:
"Recovery of costs by law clinics
X. (1) Notwithstanding the provisions of subsection 83(6) of this Act and subsection 9(2) of the Admission of Advocates Act, 1964 (Act 74 of 1964), whenever in any judicial proceedings or any dispute in respect of which legal services are rendered to a litigant or other person by a law clinic, costs become payable to such litigant or other person in terms of a judgment of the court or a settlement or otherwise, it shall be deemed that such litigant or other person has ceded his or her rights to such costs to the law clinic.
(2) If a litigant or person referred to in subsection (1) or the law clinic rendering legal services to such person has, at any time before payment of the costs deemed in terms of subsection (1) to be ceded to the law clinic, whether before or after costs become payable, given the person by whom the costs are to be paid at his or her last known address and the registrar or clerk of the court concerned, notice in writing that legal services are being or have been rendered by the law clinic, the law clinic may proceed in its own name to have such costs taxed, where appropriate, and to recover them, without being substituted on the record of the judicial proceedings concerned, if any, for the said litigant or other person.
(3) The costs referred to in subsection (1) shall be calculated and the bill of costs concerned, if any, shall be taxed as if the litigant or person to whom legal services were rendered by the law clinic, actually incurred the costs of obtaining the services of the attorney or advocate acting on his or her behalf in the proceedings or dispute concerned.
Short title
3. This Act is called the Attorneys Amendment Act, 2000 and commences on a date fixed by the President by Proclamation in the Gazette.
GENERAL EXPLANATORY NOTE :
Words underlined with a solid line indicate insertions in existing enactments.
EXPLANATORY MEMORANDUM TO ATTORNEYS AMENDMENT DRAFT BILL
1. During 1991, the Attorneys Act, No. 53 of 1979 was amended so as to insert a definition of "law clinic". One of the consequences of this amendment was to permit law clinics to engage the services of candidate attorneys, as long as such clinics were certified by the Council of the Law Society in their province as complying with the requirements prescribed by such Council for the operation of such clinic. "Law clinic" is defined in the Attorneys Act as "a centre for the practical legal education of students in the faculty of law at a university in the Republic, and includes a law centre controlled by a non-profit making organisation which provides legal services to the public free of charge".
2. Law clinics in South Africa, especially those that qualify as non-profit making organisations, have been dependent largely on donor funding from outside South Africa. These clinics, such as the Legal Resources Centre, have made significant contributions in the sphere of public interest law in South Africa, by providing legal services at no cost to their clients, which in the past often aimed at counter-acting and dismantling apartheid laws and promoting democratic values and human rights. Since the advent of democratic South Africa in 1994, they have continued with their broad mandate of practising "public interest law" and a considerable amount of legal work (both litigious and non-litigious) is undertaken by the advocates, attorneys and paralegals employed by law clinics. These clinics frequently engage the assistance of lawyers in private practice, including senior counsel and correspondent attorneys, and incur costs that cover the fees of these professionals, expert witnesses and other assistants.
3. The definition of law clinic in the Attorneys Act, and specifically that part of it that states that law clinics are those law centres providing "legal services to the public free of charge", prevents such law clinics from recovering their costs, made up of their fees and operational costs. A recent judgment of the Namibian Supreme Court suggests that as well as non-recovery of a law clinic’s own costs, the obligation to provide services free of charge may also prevent it from recovering disbursements incurred by the law clinic on behalf of its clients. The Namibian decision was dealing with the term "legal assistance", as opposed to the term "legal services" which is used in the South African Attorneys Act. However, the decision has prompted law clinics to re-examine their authority to recover all amounts expended by them in the rendering of legal services in the public interest, which has led to a desire for clarity in this regard.
4. Apart from the quest for clarity mentioned above, law clinics would benefit from reform of the law relating to recovery of their costs. There has been a decline, in recent years, in the availability of donor funding for institutions such as law clinics, and even where such institutions are still being funded, there is pressure on them from donor organisations to become progressively more self-sustaining. Also, reform of the law relating to recovery of costs by law clinics would allow clients of such clinics to be placed on an equal footing with clients who have instructed private firms of attorneys. The threat of a costs order is a powerful source of bargaining power in the litigation context, and is currently denied to clients of law clinics because of the restriction on recovery of their costs.
5. An amendment to the Attorneys Act has therefore been proposed. The effect of the amendment will be to permit law clinics to recover the costs due to their clients in successful litigation matters, for their own account, in order to compensate them for fees, operational costs and disbursements made by them on their clients’ behalf.
6. As well as permitting the recovery of costs, an amendment to the definition of "law clinic" has been proposed in order to reflect changes in the tax regime relating to non-profit making organisations (public benefit organisations). These changes have had the consequence of making it unnecessary for a "law centre" to be a two-tier structure (law centre on the one hand, and a non-profit making organisation, controlling it, on the other).
7. The proposed amendment to the Attorneys Act thus serves three purposes. The first is to clarify the position as to disbursements, so as to make it clear that law clinics are entitled to recover from their clients any amounts actually disbursed by such law clinics on behalf of the client. Secondly, the proposed amendment permits a law clinic acting on behalf of a successful litigant, to take cession from such litigant of any order for costs awarded in favour of the litigant, and to recover those costs for its own account. Thirdly, the proposed amendment permits non-profit making law centres to be constituted as one entity rather than two.
8. The common law relating to legal costs is based on the notion that the purpose of an award of costs to a successful litigant is to indemnify him or her for the expense to which he or she has been put, through having been unjustly compelled to initiate or defend litigation. Such costs are thus awarded to a litigant, and not to his or her attorney. Therefore, a deeming provision has been used in the Bill to permit law clinics to recover amounts expended by them but not actually paid to them by their clients.
9. The proposed amendment to the Attorneys Act has been framed in such a way that recovery of a law clinic’s costs, by means of a deemed cession of the costs order, from the successful litigant to the law clinic, is a proviso to the obligation on law clinics to provide legal services to the public "free of charge". This ensures that the law clinic will not be able to extract its costs from the client in any way other than that described above.