How to find a divorce lawyer in Cape Town, South Africa

Fee agreement in engagement letter

 

An engagement letter details the scope of the services to be rendered and the fees to be charged for such services, of which a fee agreement normally forms part of this engagement letter, under best practice considerations.

It is important, although not essential, when instructing a divorce attorney to enter into a so-called “fee agreement” with them right at the outset of the case. If a divorce matter becomes contested, the costs can run into thousands of Rand. It is very important for there to be an understanding between attorney and client right at the outset of the case as to how the attorney is going to bill the client. 

The most important clauses in the fee agreement would no doubt be clauses relating to the hourly rate of the attorney and the deposit. The attorney’s hourly rate would no doubt depend on his or her level of seniority. The junior attorney may charge for example between R700 and R800 per hour, whilst a more senior attorney may sometimes charge anything over R1 000 per hour.

Normally an attorney would charge a deposit at the start of the case. The deposit clause in the fee agreement may for example read as follows:

“Deposit
We shall be entitled to appropriate such sums to defray disbursements incurred on your behalf, or to pay interim accounts that are overdue. Such sums are, however, intended to be held against payment of the final account to be rendered to you, and you are expected to settle interim accounts without resort to such sums. We confirm that you will pay a deposit of R___________ as discussed with the writer.”

An attorney’s deposit sometimes varies from anything between R10 000 to R40 000 depending on the complexity of the matter and for example whether the case is going to be heard in the High Court or the Regional Court. The high court tariff would no doubt be quite a bit more than the regional court tariff. Sometimes an attorney may charge between R8 000 to R12 000 plus VAT for an uncontested divorce. That attorney may require a R15 000 deposit at the start, as he or she may not know if the matter is going to be contested or uncontested. If the matter turns out to be uncontested, the attorney would be under an ethical obligation to refund the client for any monies which are due to that client at the end of that case from the deposit which has been paid. 

Another important clause in the fee agreement would be the so-called “confidentiality clause”. Such clause may read as follows:

“Confidentiality
The firm shall hold all your confidential material and information provided to us in the course of our engagement in terms of these terms of engagement (“this engagement”) in the strictest confidence, and in particular the firm shall not make use thereof other than for the purposes of this engagement and unless with your permission or in law obliged or ordered to do so, release it only to directors, employees or third parties requiring such information for the purposes of this engagement.”

Every attorney is under an ethical obligation to keep as confidential any communications between attorney and client. It is best to have this documented in black and white.

It is important in the fee agreement to state also how VAT is applicable, for example whether the attorney’s hourly rate is including or excluding VAT. It should also state whether fees and disbursements which are quoted are including or excluding VAT. The agreement should also state that the attorney will account to the client on a regular basis, and that accounts are due and payable within 30 days of presentation of invoice. The fee agreement should also have a “jurisdiction clause”, which would for example state that the parties to the agreement agree to the Courts of South Africa having jurisdiction in respect of any claim arising from the agreement.

The fee agreement is a very important legal contract which is entered into between an attorney and a client at the start of the case. It is important to ensure that this document is correctly drafted.

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