Opinionista Omphemetse S Sibanda 8 April 2020

Covid-19 is fertile ground for lawyers, scrupulous and unscrupulous

The Covid-19 pandemic opens up a whole new field of potential lawsuits and could prove fertile ground for both ethical and unethical legal practices.

An article in the March 2020 Fortune magazine aptly summarised the current and future consequences of the Covid-19 pandemic. According to the authors, Covid-19 provides “fertile ground for lawsuits”. Lawyers (here I am using the term lawyer broadly to include all legal practitioners) are soon to hit the jackpot as Covid-19 may boost litigation.

Already there are reports in some parts of the world that corporate lawyers are benefiting from the surge in clients related to Covid-19. One class action that comes to mind is the lawsuit filed by attorney Matthew Moore of Boca Raton (part of the Berman Law Group) on behalf of individuals and business owners in the United States and the State of Florida before the US District Court of Southern Florida (Miami) “for damages suffered as a result of the Coronavirus pandemic, against Defendants, the People’s Republic of China and its various government entities overseeing the response to the Coronavirus pandemic in China generally and within Hubei Province and the City of Wuhan.”

The financial claim in this lodged case, excluding interest, lawyer’s costs and other fees, is in excess of $5-million.

In South Africa, one can think of several possible issues that may lead to lawyers heading to the courts on behalf of their client as a result of Covid-19.

For example, people who suffered Covid-19 infections could sue healthcare facilities and centres (such as hospitals, clinics nursing homes, and places that have been designated for quarantine purposes),  the food service industry (such as hotels/restaurants/cafés), and social and entertainment establishments (such as bars, taverns and related social hangouts) for failing to protect them.

Lawyers could go to court on behalf of their clients against insurance companies, and supply chain companies may be locked into a battle to determine whether or not Covid-19 is a superior force (force majeure) that should allow either party to suspend or terminate the performance of its obligations under the contract, because the pandemic gave rise to circumstances beyond their control, thus making their performance inadvisable, commercially impracticable, illegal, or impossible.

Debt-trapped people may seek the guidance of lawyers on debt restructuring to ease their financial burden. Workers may approach the CCMA and the labour courts over issues such as lack of basic labour conditions, personal protective equipment (PPE) and retrenchments due to companies having to close down because of financial strain related to the Covid-19 response by the government.

It is not overzealous to assume that our government will be another cash cow for lawyers. There are already indications that SMEs that are not 100% South African owned and do not have 70% of their employees being South African citizens may approach courts on the grounds that the Debt Relief Finance Scheme unfairly discriminates against them.

Moreover, the government and state departments may face litigation for several issues including their failure to protect frontline healthcare workers from Covid-19 infections, and damages or injuries resulting from the conduct of the army and the police during the enforcement of the lockdown.

The US is already becoming a battleground for Covid-19 related litigation. The same must be expected in South Africa, to the delight of lawyers. A US case has been lodged against the federal government and its public agencies by employees for exposure to Covid-19 while they “work with or in close proximity to objects, surfaces, and/or individuals infected with the novel coronavirus” and “were not paid the hazardous duty pay differential for exposure to virulent biologicals”.

Part of the critical Covid-19 discourse should relate to the financial burden that poor and vulnerable persons will have to bear when engaging the services of lawyers to address issues and challenges related to or incidental to Covid-19.

Unfortunately, what is clearly lacking from all Covid-19 responses in South Africa at the moment is clarity or express statements on steps taken or to be taken to ensure that clients or litigants are protected from overreaching by their lawyers. The immediate next pandemic for the poor and the vulnerable will be the self-serving and overreaching claws of our legal eagles. Already, impoverished members of our communities are compromised with the closure of universities that have been providing them with the most affordable access to legal services through legal aid clinics.

Here are two of the questions I would like to ask the government and the South African Legal Practice Council (LPC):

  • Who will protect ordinary and vulnerable persons against money-hungry, overreaching lawyers in Covid-19 related cases?
  • Should Covid-19 related matters be allowed to be a gift or a financial windfall for law practitioners from their clients?

Humphries Kerstetter, a London-based boutique law firm, is a trendsetter when it comes to conducting business in times when communities are experiencing hardship and strain, dating back to the 1998-1998 financial crisis. The firm has weighed into the fight against the Covid-19 fallout.

Not only has Humphries Kerstetter made available to companies “conflict-free, value-added legal advice at minimal cost” and published its charging rates, the firm also cut its charge rates for clients from 1 April 2020:

“We choose to stand alongside them at this time and have therefore decided to cut our rates with effect from 1 April 2020.”

Do we have in South Africa any law firm (or lawyers) prepared to step up to Humphries Kerstetter within the permissible bound of the LPC?

I am waiting with a curious eye to see the fees that attorneys and advocates who will be representing the government will be charging. Is the public purse about to suffer depletion due to high fees charged by attorneys and advocates defending the government, even at this time of public financial drain?

My goal in this article is not specifically to speak to the contentious subject of lawyers’ fees and the commercial realities of modern law firms, including what the Law Society of Southern Africa (LSSA) referred to as being “unsuitable to apply a uniform tariff across all socioeconomic areas” in its submission to the South African Law Reform Commission (SALRC) in March 2019. Nor is it my intention to paddle in-depth into the contentious debate about the tendency of unscrupulous lawyers to defraud or fleece their clients.

I am mindful of the submission of the LSSA to the South African Law Reform Commission that, in my view, rejects lawyers’ fee gatekeeping measures. According to the LSSA, South Africa is a free market economy wherein law practitioners operate, and should be allowed the freedom to contract like any other profession/business.

I am not being alarmist here. But the reality is that South African lawyers overcharging or overreaching clients is common knowledge, and it will also be one of the aftermaths of Covid-19. There are numerous cases of lawyers in South Africa acting fraudulently against clients or overcharging unsuspecting clients.

In 2016, for example (in the Law Society of the Cape of Good Hope v Mpambaniso), a lawyer who received R787,619.33 paid into his trust account on behalf of a client by the Road Accident Fund, subsequently deducted R587,619.33, claiming it as lawyers’ fees. The client in this case was used as an instrument for the enrichment of the lawyer. As Acting Judge of the High Court ML Beard in the Law Society of the Cape of Good Hope v Mpambaniso case put it, the lawyer showed no evidence of “a gnawing pain of conscience for the plight of another”.

The judge further noted what is the continuing plight of clients who often suffer at the hand of unscrupulous lawyers, many of whom are from “a vulnerable group of society – they were indigent, with little education or means of improving their lot in life”.

Another example of a lawyer overreaching was charging SARS R120,000 for merely reading a book and checking references made to the former commissioner Tom Moyane, which was exposed by the Nugent Commission of Inquiry.

It would be disingenuous of me not to bring to the attention of readers that the LLSA has also voiced concern about overcharging of clients and the need to protect the public from unscrupulous lawyers:

“The public must be protected from overcharging. Checks and balances need to be in place to ensure that a client is not charged a fee which is in excess of what is reasonable. The profession regards overreaching by legal practitioners as serious misconduct,” said the LSSA.

It must be noted that there are existing mechanisms available to the LPC to statutorily assess the reasonableness of fees charged by law practitioners in terms of the Legal Practice Act 28 of 2014 and the Contingency Fees Act 66 of 1997. But these are general oversight mechanisms which I am less concerned about. I am looking for Covid-19-specific fee regulation measures. Measures at the heart of which are humanitarian principles and humanisation of legal practice in South Africa in times of hardship following natural and other disasters such as Covid-19.

Allow me to conclude with the following quotation from an article by Sung Hui Kim, “Naked Self-Interest? Why the Legal Profession Resists Gatekeeping”, which addresses a relational approach to the practice of law:

“The relational framework offers all lawyers, whether they see themselves as professionals or business persons, a framework for understanding that they can continue to serve as society’s civic teachers in their capacity as intermediaries between the people and the law, integrating relational self-interest into their representation of clients and their community service.” DM

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