The Competition Commission of South Africa has put the boot into many of the rules governing law firms.
The Law Society of South Africa (LSSA) had sought an exemption from numerous regulations of the South African Competition Act, including rules regarding advertising, fees and reserved work. The Competition Commission knocked back the LSSA's application this week, which was first lodged in 2004, and took a swipe at many of the country's legal practices, stating that they prevent innovation and restrict competition.
The Commission found that rules in South Africa prohibiting lawyers from accepting fees outside the tariff prescribed by law were "tantamount to price fixing". It also recommended that price caps, or ceilings, be used as one possible mechanism to "protect the public from exorbitant legal fees".
The LSSA also sought to uphold a ban on law firms adopting certain methods of advertising and marketing, which it maintained was dishonourable and unworthy conduct. The Commission rejected this claim, and found that it was in the interests of consumers to lift the restrictions on advertising.
The Commission also found that rules prohibiting practitioners from sharing fees and offices with non-practicing lawyers "prevent innovation and development of a fair and competitive environment".
The LSSA said it was "disappointed" with the ruling, with many of the contentious regulations set to be overhauled when a uniform set of rules of practice are expected to commence later this year.
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