Majope and Others v The Road Accident Fund

Ms Majope and Mr Machabe were injured in separate motor vehicle accidents in 2019. They each mandated Ms Ngomana (an attorney) to lodge claims against the Road Accident Fund (RAF). They signed attorney and own client fee agreements with Ms Ngomana on 20 February 2019 and 3 March 2020 respectively. Proceedings were instituted under case numbers 308/2021 and 1309/2020. The RAF did not enter appearance to defend but conceded liability for negligence in both cases, with only quantum remaining in dispute. On 22 March 2022, when the matters came for hearing, the RAF failed to appear. Ms Ngomana and Mr Tshavhungwe (as counsel) appeared for the plaintiffs and filed damages affidavits. The draft orders they prepared included a clause stating "there is no contingency fee agreement". This triggered an enquiry by the high court into the nature of the fee agreement. The high court directed Ms Ngomana to file affidavits explaining the fee arrangements and held a virtual hearing to investigate whether the attorney and client fee agreement was in fact a contingency fee agreement.

• Whether a court is entitled to make orders that were not sought by the parties
• Whether an attorney and own client fee agreement should be incorporated into a court order
• Whether the fee agreement between the appellants and their attorney was a contingency fee agreement requiring compliance with the Contingency Fees Act 66 of 1997
• Whether legal practitioners can be deprived of their right to claim fees without being afforded a hearing
• Whether parties should be deprived of their right to recover costs from the RAF based on findings about fee agreements

Leave to intervene was granted to Ms Ngomana and Mr Tshavhungwe (third and fourth appellants) with no order as to costs. Both appeals were upheld with no order as to costs. The orders of the high court in both cases were set aside and replaced with proper default judgment orders. In case 308/2021, judgment was granted ordering the RAF to pay Ms Majope R661,795.00 for loss of earnings plus taxed or agreed party and party costs, payable within 14 days, with interest at the applicable legal rate if not paid on time, to be paid into the plaintiff's attorneys' trust account. In case 1309/2020, judgment was granted ordering the RAF to pay Mr Machabe R200,000.00 for loss of earnings plus taxed or agreed party and party costs on the same terms. The orders depriving the attorneys of fees and directing investigations were removed.

A court is not entitled to make orders that were not sought by any of the parties to the litigation. An attorney and own client fee agreement is a bilateral contract between the legal practitioner and the client which is unrelated to the litigation itself and should not be incorporated into a court order or made an order of court. Such fee agreements do not require judicial approval, unlike contingency fee agreements which require judicial oversight. A fee agreement between an attorney and client has nothing to do with a party against whom the client has a claim (such as the RAF). Legal practitioners cannot be deprived of their right to claim fees for services rendered without being afforded the opportunity to be heard, even where there may be alleged non-compliance with the Contingency Fees Act. Parties affected by court orders must be given procedural fairness and the right to be heard before orders are made against them, particularly when they are not parties to the proceedings.

The Court noted that it is open to clients to request that an attorney and client fee agreement be submitted to the Taxing Master for taxation should they wish to do so. The Court observed that to delegitimise fee agreements (which are contracts to arrange for payments outside the prescribed tariff) would erode a basic principle of South African contract law. The Court expressed particular concern that the extraordinary orders made by the high court deprived not only the legal practitioners of their fees but also deprived the plaintiffs of their right to recover costs from the RAF. The judgment emphasized that even if a fee agreement were found to be invalid due to non-compliance with the Contingency Fees Act, this alone would not be a proper basis to deprive legal practitioners of their right to claim fees for services actually rendered.

This case is significant in South African law as it reinforces important principles regarding judicial overreach and the limits of court powers. It confirms that courts may not make orders that were not sought by the parties and that parties affected by court orders must be afforded procedural fairness and the right to be heard (audi alteram partem). The judgment clarifies the distinction between attorney and client fee agreements and contingency fee agreements, holding that ordinary fee agreements are bilateral contracts between attorney and client that do not concern third parties like the RAF and should not be incorporated into court orders or subject to judicial approval. It protects the contractual freedom of legal practitioners and clients to structure fee arrangements outside prescribed tariffs. The case serves as an important reminder that even where fee agreements may have compliance issues, legal practitioners cannot be summarily deprived of remuneration for services rendered without due process. It also clarifies that only contingency fee agreements require judicial oversight, while ordinary fee agreements may be referred to the Taxing Master for taxation if the parties so choose.