Client’s rights to cost estimates when instructing legal practitioners

15 January 2021 6010

How often have you been left in the dark when it comes to estimated legal costs upon instructing legal counsel? Often, the entire scope of legal costs are not properly conveyed to clients or explained in a vague manner, which ultimately results in frustration and a breach of trust between client and legal practitioner.

To avoid uncertainty and to ensure proper transparency, the Legal Practice Act 28 of 2014 (LPA), which came into effect on 1 November 2018, governs legal practitioners (attorneys and advocates) and prescribes how they must give clients upfront cost indications and confirm legal instructions before proceeding with billable legal services.

In terms of Section 35(7) of the LPA, practising attorneys and trust account advocates must provide a written notice confirming a legal instruction and giving a cost estimate to a client upon receiving a formal instruction or as soon as practically possible thereafter.

The written notice include the following details:
• The likely financial implications, including fees, charges, disbursements and other costs;
• The hourly rate of the attorney or advocate, and an explanation to the client of his/her right to negotiate the fees payable to the attorney or advocate;
• An outline of the work to be done in respect of each stage of the litigation process, where applicable;
• The likelihood of engaging a referral advocate, as well as an explanation of the different fees that can be charged by different advocates, depending on aspects such as seniority or expertise;
• If the matter involves litigation, the legal and financial consequences of the client’s withdrawal from the litigation, as well as the costs recovery regime.

Section 35(8) prescribes that practising attorneys and trust account advocates must also explain every aspect of the above notice verbally. Furthermore, Section 35(9) prescribes that a client must agree in writing to the estimated legal services and estimated incurred costs.

Non-compliance by a practising attorney or trust account advocate with the above constitutes misconduct. In the event that a practising attorney or trust account advocate does not comply with the above, aggrieved clients can lodge requests with the Legal Practice Council to review the matter and make a determination regarding amounts to be paid.

The above does not preclude the use of contingency fee agreements in terms of the Contingency Fees Act 66 of 1997.

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Tags: #knowyourrights, Legal Practice Act