Reform of the Costs Regime – South African Prespective

The most basic of economic laws – that of supply and demand – would suggest that introducing more and more lawyers in the legal system should drive the price of legal services down and improve access to justice. Somehow that doesn’t seem to apply in SA. The current costs regime is riddled with perverse incentives that reward delay and over-servicing of clients. The system is universally criticised and regarded as unsatisfactory. This is an economic phenomenon, so to invoke economic solutions seems sensible even if these appear to run counter to traditional approaches. In this paper, first delivered at the Middle Temple & South African Conference in Cape Town in late September, Judge Malcolm Wallis provides us with some provocative thoughts on costs and access to justice and to the profession.It would make a refreshing change if we could discuss questions of costs without saying that, unless they are very rich or can obtain some form of legal aid, people are denied access to justice. It would also be refreshing if the words ‘disproportionate’, ‘billable hours’ or ‘over servicing’ did not enter the conversation, but that never seems to be the case. The theme of access to justice and the perception that legal costs are too high are always central to any discussion on costs. This is so even though the number of lawyers is growing exponentially and our law faculties are flooded with students, many of whom cannot find a place within the profession. But that is never raised in these discussions. Yet the most basic of all economic laws – that of supply and demand – would suggest that introducing more and more lawyers in the legal system should drive the price of legal services down to more affordable levels and make significant inroads into the problem of access to justice. It may be helpful to explore why this is not the case.

The two problems of costs and entry to the profession are usually dealt with entirely separately. When I was chairman of the Bar and serving on international legal bodies both were ongoing subjects of discussion. On the costs side an enormous amount of time is spent trying to simplify legal processes on the basis that if lawyers are expensive we will give them less work to get rich on.  At the same time a good deal of energy and imagination is devoted to devising ways in which people can gain access to legal services that they cannot afford or, even if they can, not at a cost they are willing to incur. Legal aid, judicare, pro bono services, and ingeniously structured fee agreements seem to be the grist to this particular mill. On the side of entry to the profession in the last twenty years or so universities have enrolled a lot of law students as a cheap way of increasing government funding, which is then used to cross-subsidise more expensive faculties, and students see law as a way to acquire both a degree and (they believe) well-paid employment in a difficult environment for finding jobs. The profession insists that practical experience and training are essential to the practice of law, but is increasingly unable to find the capacity to provide that training by way of what we call articles for candidate attorneys and pupillage for barristers. Whilst our situation at the Bar is not I suspect quite as dire as that in England, where apparently only one in six of those who pass the Bar vocational course find a place in chambers and places in solicitors’ firms are extremely hard to come by, we are already limiting the numbers who can undertake pupillage and it is notorious that many graduates are unable to obtain articles.  The end result is that we spend very large sums of public money training young lawyers at university and they are then unable to find a place in practice.

Despite this the profession has expanded markedly.  However this has not, as one might have expected, resulted in increased competition and (making allowance for inflation) lower fees. The explanation seems to lie largely in two areas….

[Click here to download the full article in PDF form.]

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