LPC tightens contingency fee rules to end rip-offs
Lawyers ripping off their clients to the tune of millions in contingency fees will be up against the new rules promulgated by the Legal Practice Council (LPC).
The Daily Dispatch notes lawyers have been exposed for taking the lion’s share of their clients’ damages and other payouts as fees, leaving disabled and vulnerable clients without the means of improving their plight, despite succeeding in multimillion-rand damages and other claims.
Ambiguities in the Contingency Fees Act have created loopholes that lawyers have exploited, notes the report.
One such lawyer, Zuko Nonxuba, claimed about R5.7m (62%) of a severely disabled man’s R9m combined damages and Road Accident Fund payout. After the Daily Dispatch exposed this, Nonxuba was finally forced to admit his contingency fee agreements were illicit and repaid his client another R3.6m.
The recently-established LPC’s new rules leave very little wriggle room for lawyers to charge more than the Act intended.
Legal cost consultant Mark Bowles, who has been an outspoken advocate against abuses, says it has taken more than a decade for the rules to be published.
In that time, he said, there was ‘huge abuse’. The rules make it clear that the fee charged by a litigant’s legal team may never exceed 25% of the damages awarded to the client, no matter how many legal practitioners are involved.
Until the rules made this aspect clear, attorneys would claim 25% of the award for themselves and then add the advocate’s fee, says the report.
They would also charge the costs they incurred.
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