A South African court has overturned a Black economic empowerment code for the legal sector, ruling the government failed to properly exercise its powers when approving measures designed to tackle persistent racial disparities in the sector.

The Gauteng High Court did not rule on the code's constitutionality or racial transformation ambitions, finding instead on Wednesday that Trade Minister Parks Tau failed to independently assess and justify the measures approved.

The code set sector-specific targets for Black ownership, management and procurement, including a goal for large law firms to reach 50% Black ownership within five years, with Black women holding 25%.

The challenge was brought by four major commercial law firms, Deneys Reitz, formerly Norton Rose Fulbright South Africa, Bowmans, Webber Wentzel and Werksmans, alongside trade union Solidarity.

Solidarity Chief Executive Dirk Hermann called the ruling "a huge victory over the government's reckless racial policy".

Tau's spokesperson did not immediately respond to a request for comment on the ruling.

The ruling deals a setback to the government's efforts to accelerate racial transformation in one of South Africa's most influential professions, while stopping short of challenging the country's broader affirmative-action framework.

Supporters of the code have argued that such measures are needed because, despite greater diversity among junior lawyers, Black practitioners remain underrepresented in senior leadership, ownership and high-value work.

The ruling comes as South African policies designed to redress the legacy of white-minority rule face renewed political and legal scrutiny, including criticism from US President Donald Trump.

The court set aside Tau's approval of the code, which was promulgated in 2024, and referred the matter back to him for reconsideration.

It said the minister was required to independently assess whether the code and its departures from general Black empowerment rules were justified before deciding whether to approve it.