Demand for probe of metro legal bills
Councillors want answers on R50m spent in last financial year
MORE than R50-million. That is how much the Nelson Mandela Bay municipality has paid in legal fees over the last financial year – and now councillors are demanding an investigation into what they say are exorbitant costs. The councillors say the metro has a legal department that is not being used efficiently and question why even the most mundane legal work is being farmed out.
The municipal public accounts committee (Mpac), which discussed the matter on Friday, is to investigate what it says are the high legal rates charged by firms to represent the city in court.
The committee will also investigate the capacity of the municipality’s legal department – which has a team of 17 people – and the distribution of work among those on the city’s legal panel.
The panel is a pool of lawyers from which the city draws to pursue civil litigation, collections, conveyancing, litigation, labour and employment law, municipal law and commercial and corporate law, among other things.
The attorneys employed in the municipality’s legal department are not certified to represent the municipality in court.
Asked why they could not get Fidelity Fund Certificates, city manager Johann Mettler said: “It is a rule of the law society that you need to be a practising attorney to get the certificate.”
The investigation will be preceded by an extensive report on the exorbitant fees paid to some firms.
That report will be tabled by Mettler at the next Mpac meeting next month.
Councillors called for the investigation after a report tabled by Mettler revealed that the city had spent R50.3-million on legal fees.
The councillors also accused the municipality of giving work to only a handful of white firms in the legal panel.
Mettler said that these claims were completely untrue.
Some of the firms mentioned in the report were Gray Moodliar Attorneys, Brown Braude and Vlok Incorporated, McWilliams and Elliot, and Goldberg and De Villiers Inc.
The total legal bill has, however, decreased from the R56.3-million spent in the 2015-16 financial year.
The legal fees for the first two quarters of the 2017-18 financial year were at R31.4-million so far, according to the report.
Mettler said he was happy with the legal bills as the money the city got back far surpassed this amount.
“A full report will give a much better picture of the distribution of work because there are thousands of matters, for example collection matters, and that is where most of the money goes in budget and treasury.”
He said the listed firms were a small sample of those used by the city.
Mettler said he would table a report detailing how much money the city got back as a result of collection orders.
“We have not lost a single matter in the high court and there are millions in fees that come back to us,” he said.
DA councillor Charles Garai said the list of firms was concerning.
“One firm has received 85% of the work from this council and that makes me very concerned,” Garai said.
“The costs involved here are horrendous. “We cannot continue like this. “We need a full-blown investigation in this department – I don’t believe it is functioning efficiently.”
Garai said the lack of detail in the report meant it was difficult to gauge what the value of the litigation was.
“What is here is horrifying. “My impression is that virtually every single matter is farmed out to an outside firm irrespective of the matter,” he said.
However, Mettler said letters of demand were done by both the legal department and external lawyers.
ANC councillor Makhi Feni said: “If you look at this report and look at the beneficiaries in terms of the firms, these are white legal firms that consistently benefit from this municipality.
“We are not doing the necessary thing, which is transformation.
“For example Gray Moodliar – there are big amounts of money here. “Are we doing justice to our people? “Black professionals out there are suffering. “An investigation must be on whether we followed the procedure in terms of black economic empowerment – this is not acceptable and must be investigated.”