What does a claims & compensation attorney cost in South Africa?

In claims and compensation work, the attorney's fee is often not the number that catches people out. The disbursements are. A no win no fee agreement can leave you owing nothing in professional fees and still owing tens of thousands of rand for expert reports. Ask about both, in writing, before you sign anything.

All figures below are typical ranges excluding VAT. They are a guide to what the market charges, not a quote, and firms vary widely by city, seniority and specialisation.

What is genuinely free

• Lodging a Road Accident Fund claim. You can lodge and pursue a claim directly with the Fund yourself at no cost. No attorney is required. See how to claim from the Road Accident Fund.
• The National Financial Ombud Scheme, for a rejected insurance claim or a banking or credit dispute. Free, no attorney needed, funded by the industry.
• The Health Professions Council of South Africa, for a complaint about a practitioner's conduct. It can discipline, but it does not award you compensation.
• The National Consumer Commission and provincial consumer affairs offices, for consumer complaints.
• A protection order under the Protection from Harassment Act 17 of 2011, applied for at the magistrates' court without an attorney.
• A first consultation at most personal injury and RAF firms.
• Legal Aid South Africa on 0800 110 110, subject to a means test.

How attorneys charge for this work

Contingency, or no win no fee. The standard arrangement in RAF and personal injury work. The Contingency Fees Act 66 of 1997 requires the agreement to be in writing and signed by you, and caps the success fee at double the attorney's normal fee or 25% of the amount awarded, whichever is lower. The 25% is calculated on the compensation, not on costs recovered from the other side. Read how no win no fee works before signing.

Hourly. Common for insurance disputes, defamation and commercial claims. Ask for an estimate of total hours per stage, not just the rate, because the rate on its own tells you nothing.

Fixed fee. Sometimes offered for discrete work such as a letter of demand or reviewing a settlement offer. Worth asking for.

Disbursements: the part people miss

Disbursements are amounts paid to third parties on your behalf. Under a contingency agreement you can still be liable for them, including if the claim fails, unless your written agreement says otherwise. This is the single most important question to ask at the first meeting.

In a serious injury or medical negligence file, expect some combination of medico-legal reports from an orthopaedic surgeon, neurosurgeon, clinical psychologist, occupational therapist and industrial psychologist, an actuarial calculation, hospital record retrieval fees, counsel's fees, sheriff's fees and court filing fees, and travel costs for examinations. Individually they look manageable. Together they are often the biggest line in the file.

Some firms carry disbursements and recover them from the award. Some ask you to fund them as you go. Some carry them until the claim fails and then invoice you. Those are three different deals. Get the answer in the agreement.

A worked example of the arithmetic

Thabo's RAF claim settles. The figures are illustrative only, chosen to show how the deductions work. They say nothing about what any claim is worth, and our RAF claim range calculator shows illustrative bands only.

• Compensation agreed: R500 000. The Fund also agrees to contribute to Thabo's legal costs.
• Normal fee for the work done at the firm's hourly rates: R80 000. Doubled: R160 000.
• 25% of R500 000: R125 000.
• The cap is the lower figure, R125 000. That is the maximum success fee.
• Disbursements: a serious injury assessment at R5 000, four medico-legal reports totalling R60 000, an actuarial report at R9 000 and record retrieval and sundries at R6 000. Total R80 000.
• Thabo's net: R500 000 less R125 000 less R80 000, which is R295 000, plus whatever part of the Fund's costs contribution the agreement says he keeps after disbursements are recovered from it.

Now suppose the claim had failed. Thabo's professional fee is nil. His disbursements are still R80 000. Whether he owes that money depends entirely on what the written agreement says about disbursements on a lost claim. That single clause is worth more than everything else in the document.

What each type of matter typically involves

RAF claim with modest injuries. Often no attorney at all if you lodge yourself. If you use one, a contingency agreement, a serious injury assessment only if general damages are in play, and perhaps one or two expert reports.

RAF claim with serious injuries. A contingency agreement, a serious injury assessment, four or more medico-legal reports, an actuarial calculation, counsel for trial, and years of carrying costs. This is where disbursements reach tens of thousands of rand.

Medical negligence. The merits opinion comes first and is payable whether it supports you or not. If it does, expect further expert reports on causation and on the cost of future care, plus counsel. It is the most expensive area in this category. Remember that a claim against a state hospital needs written notice within six months under the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002, and that deadline does not wait for the merits opinion.

Rejected insurance claim. The internal dispute and the ombud complaint cost nothing. An attorney, usually hourly, only makes sense for a large claim or where the six month time bar in the policy is about to run.

Defamation. Usually hourly or a fixed fee for a letter of demand. Contingency arrangements are rare because awards are modest. A protection order costs nothing.

Consumer dispute. The ombud and the National Consumer Commission are free, and most disputes are too small to justify an attorney.

When the costs arrive

Costs do not land in one lump. Knowing when helps you plan.

• At the first meeting: usually nothing.
• On signing a contingency agreement: nothing, unless the firm asks you to fund disbursements as you go.
• During the expert stage: this is where disbursements are incurred, over many months. Ask for a running schedule.
• At settlement: the success fee, VAT and disbursements are deducted from the award before you are paid.
• If the claim fails: no fee, but disbursements and, in litigation, a possible costs order in favour of the other side.

What drives the cost up

• Whether liability is disputed. A conceded merits claim is far cheaper than one that goes to trial on who caused the accident.
• The number of specialities involved. Each additional expert is another report and another set of fees.
• Medical negligence generally. It is the most expensive area in this category because causation has to be proved by independent experts before anyone can even sensibly issue summons.
• Going to trial rather than settling, which adds counsel's fees, trial preparation and often postponements.
• Poor record keeping by you. Reconstructing lost payslips and receipts costs time, and time is billed.

Common mistakes and what they cost

• Not asking who pays disbursements on a lost claim. This is the mistake that turns "no win no fee" into a bill.
• Assuming 25% is the fee. It is the ceiling. Where double the normal fee is lower, that lower figure is the cap.
• Not asking about VAT. VAT on the fee comes out of the same award.
• Signing without a copy. The Act requires a written agreement and you are entitled to a copy. Without it you cannot check anything.
• Accepting a settlement without a statement of account. You cannot see whether the deductions comply with the cap.
• Paying for an attorney to do what an ombud does free. For a rejected insurance claim, try the free route first.

What to do this week

1. Write down every question in the list below and take it to your first consultation.
2. Ask whether the first consultation is free, before you book it.
3. Ask for the firm's standard contingency agreement in advance, and read it at home.
4. If your matter involves a state hospital, an unidentified driver or an insurance rejection letter, calculate the deadline before you worry about cost. A prescribed claim costs nothing because it is worth nothing.
5. Compare at least two firms.

How to avoid surprises

1. Ask for a written fee estimate and a written contingency agreement, and take them home to read.
2. Ask specifically: who pays for the expert reports if we lose?
3. Ask whether the quoted figures include VAT.
4. Ask what happens to the party and party costs recovered from the other side if you win.
5. Ask for an itemised statement of account at settlement, showing the normal fee calculation, the contingency calculation and every disbursement.
6. Compare two or three firms. Fees for the same work vary more than most people expect.

If you cannot afford an attorney

Lodge your RAF claim yourself. Take your insurance rejection to the National Financial Ombud Scheme. Take a practitioner conduct complaint to the Health Professions Council. Take a consumer dispute to the National Consumer Commission. Apply for a protection order at the magistrates' court. All of these are free. For a serious injury or negligence claim that needs an attorney, a contingency agreement under the Contingency Fees Act means you pay no fee unless you win, and Legal Aid South Africa on 0800 110 110 applies a means test for those who qualify.

If you believe you have been overcharged, raise it with the firm first, then with the Legal Practice Council. A bill can also be taxed, which means an independent taxing master reviews it.

LawMatch is not a law firm and does not give legal advice. These ranges are published to help you ask better questions.