LE­GAL FIRMS RIP­PING OFF STATE – NGOEPE

Most of the R1bn govern­ment has spent on le­gal ser­vices in the past year was never acted upon

CityPress - - Business - LE­SETJA MALOPE le­setja.malope@city­press.co.za

Re­tired judge Bernard Ngoepe has raised con­cerns about the ex­or­bi­tant fees charged by le­gal firms when deal­ing with the state.

Ngoepe, who is also the coun­try’s tax om­buds­man, said in an in­ter­view re­cently that there was seem­ingly a con­cern­ing ten­dency of firms charg­ing high prices for le­gal ser­vices ren­dered to govern­ment de­part­ments.

Govern­ment al­legedly spent R1 bil­lion on le­gal fees in the past fi­nan­cial year.

Hav­ing served the coun­try’s le­gal fra­ter­nity with dis­tinc­tion for al­most five decades, Ngoepe was at pains to point out two ma­jor is­sues that seem to plague the pro­fes­sion.

“I must reg­is­ter pub­licly my con­cern about the seem­ingly – and I use the word seem­ingly – ex­or­bi­tant fees charged by le­gal firms, es­pe­cially when they are be­ing asked by govern­ment to con­duct foren­sic in­ves­ti­ga­tions.

“Se­condly, I am con­cerned some of the ex­pen­sive le­gal opin­ions given to govern­ment de­part­ments are not as good as they should be,” he said, tap­ping on the ta­ble in a bid to em­pha­sise the point.

“They are just not good enough, they ap­pear to be in­ac­cu­rate and that con­cerns me,” he said, cit­ing a 40-page le­gal opin­ion worth mil­lions of rands.

He fur­ther pointed out that he hoped the coun­try would achieve a bal­anced ju­rispru­dence.

“In other words, bal­anced judg­ments that will lead us to the right di­rec­tion and that can be achieved by a re­al­is­tic, prag­matic in­ter­pre­ta­tion and ap­pli­ca­tion of the Con­sti­tu­tion,” said the soft-spo­ken judge, deny­ing that he meant there was not enough sober judge­ment.

“No, I am not say­ing [that there are not suf­fi­cient sober-minded de­ci­sions in our courts], I am just say­ing we must al­ways strive to in­ter­pret and ap­ply our Con­sti­tu­tion in a prag­matic and bal­anced way. I am say­ing we should con­tinue to do that,” he said.

Govern­ment spend on lit­i­ga­tion has been a ma­jor con­cern, with most prom­i­nent le­gal opin­ions paid for by the state not be­ing acted upon and most cases that head to court be­ing un­suc­cess­ful when chal­lenged.

Govern­ment has al­legedly spent al­most R1 bil­lion in le­gal ser­vices and that amount ex­cludes that spent by paras­tatals.

Eskom, which has had al­most 10 ma­jor in­ves­ti­ga­tions in as many years, said it spent R46 mil­lion on foren­sic in­ves­ti­ga­tions us­ing 22 firms in the past fi­nan­cial year.

“Eskom ap­pointed 35 law firms from its panel of at­tor­neys against a spend of about R72.3 mil­lion across both civil lit­i­ga­tion and le­gal opin­ions, with the for­mer re­ceiv­ing more fees ow­ing to Eskom hav­ing to de­fend its in­ter­est dur­ing the pre­vi­ous fi­nan­cial year.

“Eskom’s le­gal cost as a per­cent­age of rev­enue falls in the 50th per­centile of the global peer group and is rel­a­tively com­pa­ra­ble to the lo­cal peer group,” Eskom’s me­dia desk said.

An­other ma­jor paras­tatal, the Pas­sen­ger Rail Agency of SA (Prasa), paid R184 mil­lion in le­gal costs and a fur­ther R152 mil­lion on foren­sic in­ves­ti­ga­tions.

How­ever, one of Prasa’s most re­cent foren­sic in­ves­ti­ga­tions, con­ducted by Werks­mans At­tor­neys, cost the com­pany more than R130 mil­lion.

The in­ves­ti­ga­tion was a ma­jor bone of con­tention be­tween the board and the trans­port min­is­ter and is yet to yield a sin­gle sig­nif­i­cant con­vic­tion.

De­spite nu­mer­ous re­quests, the depart­ment of jus­tice did not pro­vide any fig­ures.

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