KwaZulu-Natal Law Society v Moodley

• Jurisdiction: South Africa
• Judge: Vahed J, Ploos Van Amstel J
• Judgment Date: 09 May 2014
• Docket Number: 3072/2012
• Court: KwaZulu-Natal High Court, Pietermaritzburg
• Hearing Date: 21 February 2014
• Citation: 2014 JDR 1041 (KZP)

Vahed J:

[1]

In an article titled Are Lawyers Truly Greedy? An Analysis Of Relevant Empirical Evidence published in New England Law | Boston Legal Studies Research Paper [Research Paper 13-15] on 9 October 2013 Paul F Teich wrote:

'Since the early 1990s, the majority of Americans have repeatedly expressed the belief that lawyers charge too much for their services. The public is concerned not only about fee size but also about billing misconduct. It is claimed, for example, that lawyers routinely hide the reasons that fees are imposed, refuse to account for their hours, and charge for services that have never been provided-that they routinely fee gouge. Understandably then, the majority also believe that lawyers earn excessive incomes and that the average practicing lawyer is quite literally "greedy."

Every lawyer should take the public's concern about greed seriously, and bar leaders should worry about the factors that provoke that concern. When deciding whether to secure a lawyer's help, Americans consider the likely cost of help to be critically important. Americans pay for personal legal services primarily from current income, and cost is the principal reason Americans avoid bringing otherwise insoluble law-

2014 JDR 1041 p2

Vahed J

related problems to lawyers. Further, if lawyers are routinely cheating clients, as is often charged, their dishonesty should be considered a shameful professionalism problem that disciplinary authorities need to aggressively confront and eliminate. Finally, public beliefs about lawyer greed are influential determinants of the profession's occupational prestige, and the reputation of lawyers affects public confidence in the justice system generally. Greed, in all its purported manifestations, is worth studying and addressing, and mistaken beliefs about lawyer behaviour and motivation are worth correcting.'

[2]

Teich could just have easily been describing the situation in South Africa because far too many cases involving lawyer greed are featuring on the court rolls these days and the present matter is yet another.

[3]

The applicant Law Society seeks an Order, inter alia, striking the first respondent's name from the roll of attorneys. The first respondent resists the relief sought. But first, a recount of the facts.

[4]

The first respondent was admitted and enrolled as an attorney of this Court on 8 November 1993. He practises for his own account under the name and style Deena Moodley and Associates in central Durban.

[5]

Mrs N M Mkhize was a client of the first respondent. Her husband had been shot and killed on 22 October 2005 and she retained the services of the first respondent to report and wind-up her late husband's estate and to assist in lodging and pursuing two claims (worth in total R600 000,00) against the Old Mutual Insurance Company in terms of two life insurance policies taken on the deceased's life and in respect of which she was the sole nominated beneficiary.

2014 JDR 1041 p3

Vahed J

[6]

The estate consisted of a single asset, certain immovable property situated at Isipingo, Durban.

[7]

At the respondent's offices she was seen and attended to by a Mr M P Gumede, apparently a clerk in the first respondent's employ. Although not a professional person, it appears that Mr Gumede was in a fairly advanced stage towards completing his legal studies. In fact, during the period 2001 to 2006, Gumede was the first respondent's articled clerk but remained in his employ after that five year period of articles expired. It was common cause that Gumede at all times acted under the direct control and supervision of the first respondent. Everything Gumede did was done in consultation with the first respondent.

[8]

It appears that after an enquiry made by her as to the progress of her matters Mrs Mkhize received a letter dated 14 March 2007 from the first respondent's firm, signed by Gumede, in the following terms:

'RE: STATEMENT OF ACCOUNT DUE BY YOU TO DEENA MOODLEY AND ASSOCIATES

As per fee agreement of 25% entered into by yourself and Deena Moodley and Associates

Instructions being to persue (sic) 2 claims against Old Mutual viz:

1. Policy No 14362649	:R100 000 00 successfully claimed
2. Policy No 14444740	:R500 000 00 successfully claimed
3. Save immovable property (debt)	:R417 059 53 settled on 15/03/07
Fees charged 25% of R600 000 00 =	:R150 000 00

Cancellation costs and transfer fees are not included.'

2014 JDR 1041 p4

Vahed J

[9]

Not being satisfied Mrs Mkhize sought assistance and ultimately, on 20 April 2009, a complaint was lodged with the applicant.

[10]

In dealing with the complaint the first respondent submitted an affidavit deposed to by Gumede and himself delivered an affidavit confirming the contents of Gumede's affidavit. From that response it can be gleaned that when initially taking instructions from Mrs Mkhize, Gumede, inter alia, caused her to conclude a contingency fee agreement with the first respondent's firm.

[11]

That response also alluded to the fact that the first respondent regarded the fee charged of R150 000,00 as being fair and reasonable. He justified the fee on the basis that he assumed risk in processing the claims.

[12]

I pause to mention that as at the date of the complaint and the response thereto the estate remained unresolved.

[13]

There is no need to repeat the contents of the contingency fee agreement here. It suffices to state that it was one concluded in terms of the Contingency Fees Act, 66 of 1997 ("the Act") and contained repeated references to litigation contemplated by the client (Mrs Mkhize) and provided for a fee of 25% of the amount...