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The difference between party and party costs and attorney and client costs are becoming a problem.

PARTY AND PARTY COSTS

Party and Party costs are those costs recoverable from the other side provided there is a costs order or agreement to pay the costs. The following also constitutes only Party and Party costs and nothing more:

  • Defendant shall pay the Plaintiff’s Party and Party costs on the High Court scale
  • Defendant shall pay the Plaintiff’s Party and Party costs
  • Defendant shall pay the Plaintiff’s costs on the High Court scale
  • Defendant shall pay the Plaintiff’s Party and Party costs on the Magistrate’s Court scale
  • Defendant shall pay the Plaintiff’s costs on the Magistrate’s Court scale
  • Defendant shall pay the Plaintiff’s costs
  • Defendant shall pay all Plaintiff’s costs
  • Defendant shall pay all Plaintiff’s costs of the day (meaning wasted costs but still only Party and Party costs)
  • Defendant shall pay any costs incurred by Plaintiff

All the above have the exact same meaning – Party and Party costs as per the tariff.

Jacobs & Ehlers par 30 pg 40 refers:

….the proper principle upon which Party and Party costs should be taxed is that the successful party should have an indemnity against costs reasonable incurred in prosecuting or defending the action,…

Jacobs & Ehlers par 31 pg 41 refers:

The indemnity principle, with regard to which rule 70(3) is framed, requires the taxing master to hold a balance. On the one hand the successful litigant, who has been awarded his Party and Party costs, must be made whole by being able to recover costs necessarily and/or properly incurred. On the other hand the unsuccessful party, against whom an award has been made, must not be required to pay an excessive amount of costs.

Jacobs & Ehlers par 31 pg 42 and 43 refers:

PARTY AND PARTY COSTS ARE COSTS OF THE PARTY AND NOT THE ATTORNEY

It is important to note that although the Party and Party costs are the costs of the party and not the attorney, experience over the years has led to a well established practice.

In practice the Party and Party costs are set off against the Attorney and Client costs and the client therefor pays the difference. It would be an impossible task should the client be paid the Party and Party costs and the attorney then has to recover his/her fees from the client. This has been the practice for many decades and has become trite law. It is also the practice in the UK courts of law. An attorney is an officer of the Court and hence has a duty to act honest and in the best interest of his/her client. The monies are trust monies and the attorney has no interest therein other than ensuring his/her recovery of the Attorney and Client costs.

ATTORNEY AND CLIENT COSTS

Hawkins v Gelb & another 1959 (1) SA 702 (W) at 705

Attorney and Client costs are the costs which an attorney is entitled to recover from his client for the disbursements made by him on behalf of his client and the professional services rendered by him. In the wide sense it includes all the costs the attorney is entitled to recover against his client on taxation of his bill of costs, but in the narrow and more technical sense the term is applied to those costs, charges and expenses as between Attorney and Client which ordinarily the client cannot recover from the other party.

Herbstein & Van Winsen 432.

The recovery by an attorney of his costs from his client does not depend upon an award for costs being made in the attorney’s favour. The attorney, subject to the court’s depriving him of any portion of his costs, and this the Court may in appropriate circumstances do, is entitled to be properly remunerated for his services.

Examples of Attorney and Client costs as per Jacobs & Ehlers par 37 pgs 47 and 48

ATTORNEY AND “OWN” CLIENT COSTS

Please note that there is no such thing as attorney and “own” client costs. Attorney and Client costs and attorney and “own” client costs are one and the same thing.

Should a party wish to obtain attorney and “own” client costs from the other side, they should specifically note the words:

“Defendant shall pay Plaintiff’s Attorney and Client costs at the rate of R…… per hour” or “Defendant shall pay Plaintiff’s Attorney and Client costs as per the agreement between the attorney and his/her client” or “Defendant shall pay Plaintiff’s Attorney and Client costs as per the mandate between the attorney and his/her client”.

Attorney and Client costs payable by the attorney’s own client follows the signed mandate or fee agreement. If no mandate or fee agreement exists, the Court tariffs shall apply.

THE HIGH COURT TARIFF

The Court tariff of the High Court of South Africa are determined by Rule 70 of the Rules of Court.

This tariff has been increased as follows during the past 17 years:

The tariff that existed prior to 30/09/91 was increased by 70% flat multiplication up to 31/10/91 then by 100% up to 30/06/93.

The same tariff was then replaced with an entirely new tariff as from 01/07/93 and again replaced with a new tariff as from 21/10/96.

I was the then Taxing Master of the High Court in Cape Town and therefor tasked with the implementation of this new tariff.

The 21/10/96 tariff was set at R100.00 per quarter of an hour or part thereof for time related attendances such as consultations and court attendances. Telephone calls were, according to the tariff, to be charged also at R100.00 per quarter of an hour or part thereof but this then caused some confusion as attorneys were then charging R100.00 for a 1 minute telephone call whereas the previous tariff allowed R7.50 for a 3 minute call.

The Registrars from all the High Court over the entire country then had a brainstorming session at Umhlanga Rocks for three days (sometime in 1997). They then brought out a directive that a minimum time for a telephone would be 3 minutes and a charge of R20.00 per 3 minutes or part thereof would be charged. Therefor a 1 minute call is set at 3 minutes and charged at R20.00 and a 4, 5 or 6 minute call would be charged at R40.00. This was a fair practice and has become a well known accepted practice throughout the country.

I would like to point out that there was a huge increase between the 21/10/96 tariff and the preceding tariff. The hourly rate was basically changed from R150.00 per hour to R400.00 per hour. Letters drafted were increased from R8.00 per folio to R40.00 per page. Pleadings drafted were increased from R15.00 per folio to R100.00 per page. Although there is a difference between a folio and a page (1 folio = 100 words or part thereof and 1 page = 250 words or part thereof), it was still a huge increase.

From 05/01/04 the “new” 1996 tariff was increased again with a numeral of “x 0.25” which created the current tariff of R500 per hour (R125.00 per quarter of an hour or part thereof). This increase was clearly not justifiable in any commercial sense as the preceding tariff was introduced 8 years prior to the marginal increase of 25%.

During 2005, The Chief Registrar approached me to report on my suggestions regarding a new tariff to be implemented. I wrote a full report and suggested a 125% increase throughout the tariff as was previously done with the tariff that preceded the 01/07/93 tariff. Unfortunately with the untimely passing of the previous Chief Registrar, nothing came of my suggestions as she was driving the process.

Today, a further 4 years down the line from the previous marginal increase, the attorneys are still using a tariff that is 12 years old and which only had an increase of 25%.

THE MAGISTRATE’S COURT TARIFF

The same can be said for the Magistrate’s Court tariff which allows only for R80.00 per quarter of an hour or part thereof (scale C – highest tariff) and letters drafted at R13.00 per folio (scale C – highest tariff) etc. The last increase in the Magistrate’s Court tariff, which is also governed by the rules of court, was 18/02/02. Clearly this tariff is also very outdated and need at least a 100% increase.

SPECIFIC RATES

I have over 250 attorney firms making use of my services. Not a single one of them charge on the Party and Party rate as set out by the Rules of Court. An average fee for a candidate attorney would be R750.00 per hour, a junior admitted attorney of 1 year standing R950.00 per hour, a junior partner R1,200.00 per hour and a senior partner anything up to R4500.00 per hour. An Attorney and Client rate for a UK solicitor would be ₤1,200.00 for a matter with fair complexity and operating from London central. It does become cheaper at the outskirts of London and surrounds.

COUNSEL’S FEES

The Bar Council of the different provinces of South Africa regulates Counsel’s fees by increasing the “guidelines” each year. The current Cape Bar Council tariffs are set out below as an example:

It is to be noted that where an attorney acts as Counsel in the High Court his/her seniority is halved and then may charge the same fee as Counsel.

Furthermore, the Magistrate’s Court only allows for R67.00 per quarter of an hour or part thereof for Counsel’s chamber work and R937.00 as a first day fee. Counsel will on an Attorney and Client basis still charge as per the guidelines and there is nothing wrong with that practice. The problem is once again the difference between Party and Party and Attorney and Client. If the law maker kept track of updating the tariff the discrepancy would not have been that appalling. Once again it is not Counsel who is over reaching the client but the outdated Party and Party tariff.

CONCLUSION

It is therefor clear that the courts have over the years established a very clear difference between Party and Party costs and Attorney and Client costs.

It is because of the lack of proper administration by the law maker that this huge discrepancy between Party and Party costs and Attorney and Client costs exists. It is by no means the cause of any attorney’s over reaching.

Surely it is clear to anyone’s logic and reasonable mind, that if the Party and Party tariff is not increased for many years, inflation will start to increase the difference between Party and Party costs and Attorney and Client costs.

Because of these facts the difference between Party and Party costs and Attorney and Client costs had increased from 30% to 70% (average) over the years, as the tariffs has become more and more outdated.

The law maker should urgently revise all court tariffs in order to diminish the large gap solely caused by outdated Party and Party tariffs, both in the High Court and the Magistrate’s Court.

I would like to express my opinion that due to the above, attorneys are in fact undercharging themselves as they are reducing their fees to be more in line with the outdated tariff.

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