If you think you have a good legal case but can’t afford to pursue it, the Contingency Fees Act may have some good news for you. In an attempt to provide access to justice for all, it allows attorneys and advocates to enter into a “no win, no fee” agreement with you, and for you to agree on a “success fee” higher than the normal fee would be.
Success fees and the Constitutional Court cases
- In the event of a “win”, the success fee to be charged may be up to twice the agreed upon normal fee, capped at a maximum of 25% of any monetary amount you are awarded or recover. So if, for example, you are awarded R1m and the normal fee would amount to R100,000, you can be charged up to R200,000 (twice the normal fee). But if the normal fee would be R150,000, you cannot be charged R300,000 (twice normal fee) but only up to R250,000 (25% of R1m). Note that you can never be charged more – definitive Constitutional Court cases last year confirmed that only these statutory contingency fee agreements are valid and that “common law” arrangements providing for higher fees are invalid.
- Contingency fee agreements are most commonly associated with personal injury or motor accident claims, but in fact they can be used for most types of claim. The only specific exclusions are criminal proceedings and family law matters.
- The attorney or advocate must be of the opinion that you have “reasonable prospects” of success. Not only is this a specific requirement of the Act, but no reputable lawyer will risk sacrificing substantial billable hours without a reasonable expectation of recovery down the line.
- Your contingency fees agreement must be in writing and in a specified format, including an agreed definition of what will constitute success or partial success, and an agreement as to how disbursements will be handled.
A word of caution
Don’t forget that if you lose your case, you may still be in for certain “direct expenses” and will certainly risk having to pay the opposing side’s legal costs – discuss this with your attorney before deciding what is best for you.
Note: The original of this article appears on Ashersons Attorneys website, here.