practitioners_guide_to_costsIt is a little known fact, but even legal costs consultants are often shocked by the costs incurred at the expense of litigants. On occasion, the legal costs incurred towards resolving a controversy is closer to an abomination than actual relief sought, and it seems that many practitioners do not consider two basic principles of the office they hold, being:

“Legal proceedings are not a game of chess. The goal of all those involved should be to arrive in a fair way at a decision, in the quickest and most cost-effective manner.” (1)
and
“As officer of the Court the attorney is enjoined to act responsibly and to draw his … bill of costs so as to include therein only what is permissible to recover … What is permissible are … those costs which an honest, experienced and capable practitioner would consider reasonable in relation to the particular claim or defence, bearing in mind the requirements of efficient practice and the exigencies of litigation.” (2)

In evaluating costs, one needs a reference. The only updated reference remains the tariff promulgated for attorneys towards litigious costs, as the advocates’ profession no longer proffers recommended ‘parameters’ of fees, arguing that to do so would amount to price-fixing.

The fact that such parameters could be applied as a basic guideline, or starting point – as the outdated parameters are still being used for – on consideration of the reasonable costs of remuneration due as a result of the seniority required from an attendance is lost in that argument, as is the fact that such parameters do not constitute price-fixing when considering costs due on contribution, from a losing litigant.

Over the course of the 1st halve of 2011, we invited more than 1700 potential participants to share their views on the basic building blocks of legal costs, in 2011, in South Africa. 102 practitioners responded, and the insight gained is invaluable. The summary of the findings sets out the profile of the participants, and suffice to say that the sample – albeit small – carries a lot of weight in the absence of any similar research.

The basic grid of costs refers to an ‘average low’, an ‘average’ and an ‘average high’ value for the basic types of costs we come across in practise, and:
a) the ‘average’ value represents the average of the sum of the submissions received,
b) the ‘average low’ value represents the average of the sum of all the submissions received under the average, and
c) the ‘average high’ value represents the average of the sum of all submissions received above the average.

The grid references outliers, and indicates to what extent the responses received exceeded the ‘average high’ value. A high percentage of ‘votes’ that exceed the average high value would seem to indicate less consensus on a matter, and suggests to a taxing official to ventilate his discretion on such matters.

All in all, the basic grid seems to fall in line with what we experience and deem generally reasonable as a starting point in Gauteng, and – it would seem – in the Western Cape. Interestingly, the consensus towards the basic disbursements around file opening fees, telephonic charges and emails are substantially less than what was expected. Of course, it is shocking to see some practitioners bill in excess of R40 000.00 a day in an economy as large as some American cites, but – in all fairness – there are matters that justify such senior costs, as a result of the seniority required from that matter.

It must be noted, however, that such senior costs can easily constitute costs overcautiously incurred, and largely remains luxurious costs not recoverable from an opponent.

My sincere thanks to all who participated. We’ll see you again in 2013!

getyourcopynowTo receive a copy of the Legal Costs Survey 2011, simply click here to email the request, we will reply with the copy of the PDF report.

The winners of the 5 copies of ‘The Legal practitioner’s Handbook on Costs’ (2nd ed) are:

  • A Viljoen
  • G Motaung
  • P Robinson
  • A Naidoo
  • R Harkoo

1.) Translated version of the comments of Van Dijkhorst (J) in Rosenburg v Direkteur van Openbare Vervolgings [2000] 1 All SA 665 (T) at 672D – E.
2.) Per MT Steyn (J) in Van Rooyen vs. Commercial Union Assurance Co of SA Ltd, 1983(2) SA 465 (O) at 468C – E.

Contributed by:
Albert Reinecke

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