Sticking to the letter of the law to cut costs
THE Transport Department says it is reducing litigation costs by ensuring that administrative decisions are carried out within the ambit of the law and that suppliers are paid on time.
This was revealed by Transport Minister Blade Nzimande after it emerged that the department has paid about R35 million in legal costs over the past three years.
He was responding to a question from the DA’s Chris Hunsinger, who wanted to know about litigation involving the department and measurables in place to ensure that all litigation matters are handled in a way that ensures a favourable outcome.
Nzimande said R35m was spent on legal fees since 2015-16 with at least R1.9m spent since April this year.
One of the department’s legal cases was litigation over the Tasima contract, with the Constitutional Court finding in favour of the government, declaring the 2010 extension unlawful.
Another related to the Prodiba contract in which the Supreme Court of Appeal found in favour of the department and declared the 2010 contract extension as unlawful.
When Prodiba appealed to the Constitutional Court, it dismissed the leave to appeal as it found there were no prospects of success.
Nzimande said the department attended to each legal matter received, with consultation and obtaining of instructions from the relevant line function and provided full instructions with supporting documentation to the State Attorney within the court time frames. “The department assesses the probability of success on the matter before engaging in litigation. It ensures the appointments of legal teams with the requisite experience and expertise.”
Nzimande also said the reduction of litigation costs was also ensuring that administrative decisions were carried out within the ambit of the law, which reduces review applications in courts, and that suppliers were paid well on time.
“The strengthening of contract management by Supply Chain Management has added a further control to avoid mismanagement that may lead to litigation,” he said.
He said Airports Company South Africa (Acsa) has an internal legal counsel who provided an oversight role to the litigation matters.
“Upon receipt of any litigation matter by the legal department, its merits are assessed by the litigation department headed up by the senior legal counsel in consultation with the group legal counsel and gets allocated to a law firm based on their expertise and affirmative action credentials.
“This ensures that the matters are allocated to law firms and advocates with the requisite skills and capacity to deal with the matter concerned. The legal counsel has an oversight role on the matter by vetting all documents, attending consultations and guiding the strategy on the matter.”
Nzimande said South African National Road Agency Limited (Sanral) was in the process of reconfiguring its in-house legal department.
“This should enable Sanral to detect complaints at an early stage, affording it an opportunity to manage and contain such complaints where possible to alleviate the immediate need to secure external service providers prematurely.”