After years of strong denials, personal injury law firm Ronald Bobroff and Partners (RBP) has acknowledged that its common law contingency fee agreement was illegal.
It has never previously made such a concession.
This acknowledgement flowed from an application in the South Gauteng High Court (SGHC) in which three former RBP clients demanded that RBP refund them the overcharged amounts the law firm charged in terms of the illegal contingency fee agreements.
The clients are Juanne de la Guerre, Ursha Fourie and Anthony de Pontes and they sought a refund of the amounts RBP overcharged them when they claimed from the Road Accident Fund (RAF).
Shortly before the matters were to be called in court, RBP’s senior counsel proposed that all three matters be settled out of court but that the settlement agreements are made an order of court.
The parties then negotiated a settlement in which RBP acknowledged that its fee agreements are unlawful, after which Judge Ratha Mokgoatlheng made it an order of the court.
Until this acknowledgement of RBP, the firm maintained that its common law contingency fee agreements adhered to a determination by the LSNP made in 2002 and were therefore legal. According to this determination, a law firm may in some cases charge more than the Contingency Fees Act prescribes.
The Act states that a law firm may charge twice the normal attorney-client fees, or 25% of the settlement, whichever is the lesser amount.
However, RBP sometimes charged as much as 40% of the payout. Moneyweb is in possession of RBP’s account to one of its clients, which suggests that it charged the client more than the capital received from the RAF.
No comment was received from Ronald Bobroff at the time of publication.
This settlement follows several legal battles
Earlier this year De la Guerre won a decisive Constitutional Court victory against RBP in which it declared RBP’s fee agreement to have been unlawful. It paved the way for other claimants such as Fourie and De Pontes to institute similar claims. Notwithstanding the De la Guerre judgment there have been numerous other legal skirmishes since then relating to RBP’s fee agreements. It has lost every case with costs.
Not only RBP under the spotlight
At the same time as RBP’s three matters were to have been argued in court, law firm Norman Berger and Partners (NBP) also brought an application against Hauptfleisch Attorneys for the apparent overcharging of its client Matjaje David Matabane.
Hauptfleisch Attorneys processed Matabane’s claim against the RAF and had charged him a Common Law Contingency Fee. Judge Mokgoatlheng stated during legal argument that this agreement was also illegal and stood the matter down so that the parties could agree on a settlement agreement.
Founder and Chairman of NBP, Norman Berger, told Moneyweb that he had been in practice for 58 years and that the Contingency Fees Act (CFA), which came into operation almost fifteen years ago, had made access to justice possible for those who previously had no access. “The CFA really opened the gates of justice to the poorest of the poor. I am horrified that it has been so trampled underfoot and that attorneys have abused their clients by operating outside of its parameters.”
Attorney Pierre Hauptfleisch said this case couldn’t be equated with the RBP matters.
He said he had charged his client R450 000 in fees on a R1.8 million claim and that the account that he was going to send Matabane now, “is going to be twice that amount.”
He further denied that his fee agreement was declared by the court to have been illegal. This journalist was in court for the proceedings and has seen the court order. Moneyweb stands by its report.
Furthermore, Hauptfleisch conceded his firm’s wrongdoing by agreeing to pay Matabane’s costs on the highest tariff.