In 2004, the Law Society of South Africa (LSSA) representing approximately 20,700 attorneys and 5 000 candidate attorneys, sought to exempt its rules governing the legal profession from the provisions of chapter 2 of the Competition Act. The exemption application concerned the LSSA's rules on professional fees, reserved work, organisational forms, multi-disciplinary practices, advertising, marketing and touting.

In 2011, the Commission rejected the LSSA's exemption application. Following the rejection, both parties committed to resolve all matters concerning the rules. Since then the parties have met to discuss the issues surrounding the Commission's refusal to grant the exemption.

The result of the consultation was that until the finalisation of the new Legal Practice Bill, the existing LSSA rules would continue to apply, subject to a liberalisation of the rule relating to advertising which will now be read to permit advertisements that don’t offend the Advertising Standard's Authority Code in so far as it relates to truthfulness and non-misrepresentation, notwithstanding the Commission's finding that certain rules restrict competition. The parties agreed that the rules cannot be excluded without being replaced by new rules, as this would create an untenable vacuum.

The Legal Practice Bill is set to go before Parliament shortly and is said to resolve the issues between the LSSA and Commission. Pending the implementation of this statute, the LSSA has agreed to apply the rules in a manner that is not offensive to competition law. Most notably, this includes a lift on the enforcement of prescribed minimum tariffs, which will allow attorneys to charge fees below the minimum tariffs prescribed in the rules.

Written by: Chris Charter, Director, Competition, Cliffe Dekker Hofmeyr

Kayley de Oliveira, Associate, Competition, Cliffe Dekker Hofmeyr