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No win, no fee: Is it legal and what is or is not allowed?

On 01 November 2020, Carte Blanche (the investigative journalism programme on MNET) ran a story about a company named Employment Law Experts. The said company has a website on which it markets itself as labour law experts that help clients with labour law claims on a “no win, no fee” basis.

The so-called “no win, no fee” basis is formally known as doing legal work on a contingency basis. 

For an attorney to do legal work on a contingency fee basis is a formal arrangement concluded in terms of the Contingency Fee Act of 1997.

A contingency fee agreement must according to the Contingency Fees Act of 1997 be in writing and must contain certain clauses to be valid. An example of a clause to be included in a contingency fee agreement is that the attorney and advocate must both be of the opinion that the merits of the matters are good enough that legal work be done on a contingency basis. Merits refer to the prospects of success of the client’s claim.

In order for an attorney to state that the merits of the matter seem good, he or she must consult with the client to determine what the merits are. An attorney cannot determine a client’s merits without discussing the facts and version in detail.

In the said Carte Blanche clip the company would forward per email a prospective client some documents to complete. The company would not consult with the client in detail and therefore cannot determine what the merits of a matter are or if the merits seem good enough to affect the legal work on a contingency basis.

Our office has for instance affected two mandates on a “no win, no fee” basis. One of them was a dog bite matter and one was a labour law matter. Both said claims were won with costs, which means the merits were indeed good enough to have affected legal work on a contingency basis. 

In the case of a contingency fee agreement our office uses a formal and lengthy contingency fee agreement that is signed by us, the advocate and the client to regulate the terms of payment and work throughout the matter.

Do not trust opportunistic companies that are not real lawyers to handle your legal claims. Approach a proper law firm and consult with a real attorney.

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