Further to the story in our August newsletter (available here), the Competition Tribunal has found that the Cape Law Society's (CLS) rule prohibiting touting by attorneys is not anti-competitive.

This matter concerned a competition law challenge by an attorney, Johan Venter, against the CLS's rule against touting. The CLS had brought an application in the Cape High Court (High Court) to strike Venter from the roll of attorneys for paying a tout to coerce car accident victims in hospital to brief Venter for Road Accident Fund claims. Venter argued that the CLS rule against touting is anti-competitive, at which point the High Court referred the matter to the Tribunal.

The Tribunal initially heard evidence by Venter and the CLS, and then requested that the Competition Commission and Law Society of South Africa (LSSA) be joined to make submissions. The Tribunal held that:

• all law societies' rules fall within the ambit of the Competition Act;
• although law societies' rules may constitute "public regulations" as defined in the Competition Act, the rules nevertheless also fall within the ambit of section 4(1) by virtue of the fact that they constitute a "decision by an association of firms";
• the CLS rule prohibiting touting does not fall within the price fixing prohibition contained in section 4(1)(b), as it is not a "purchase or selling price" or another "trading condition" which relates to a pricing element, as intended by the price fixing prohibition;
• although the anti-touting rule may fall within the ambit of section 4(1)(a), Venter failed to produce evidence showing that the rule results in any anti-competitive effect;
• the CLS rule prohibiting touting does not contravene the Competition Act.

The Tribunal, however, limited its decision to the particular facts of this case, meaning that the rule prohibiting touting (and any other law society rule) is not immunised against further competition law challenges.

Shawn van der Meulen, a partner at Webber Wentzel, had the following to say: "While the Tribunal correctly found in this case that the CLS rule against touting is not anti-competitive, in deciding that law society rules are subject to section 4(1) of the Competition Act (notwithstanding that they are "public regulations"), the Tribunal has opened itself up to further challenges against this and other law society rules in future. However, hopefully the new Legal Practice Bill when enacted will address any competition concerns with the current rules of the law societies."

The Webber Wentzel team representing the LSSA comprised Shawn van der Meulen and Morgan Wood.