A Complete Guide to Lawyers Contingency Fees in South Africa

South African attorneys may charge contingency fees only through a written agreement that complies with the Contingency Fees Act 66 of 1997. The Act permits two statutory fee models: a no-fee model where the practitioner receives nothing if the matter is unsuccessful, and a higher-success-fee model where the practitioner may charge an agreed uplift on normal fees after success. In both cases the success fee is capped at the lower of twice the attorney’s normal fee and, in claims sounding in money, 25% of the amount awarded or recovered excluding costs. Clients should obtain a written explanation of ordinary fees, the success calculation, expenses, settlement consequences and the cooling-off mechanism before signing.

What Is a Contingency-Fee Agreement in South Africa?

A contingency-fee agreement is a statutory arrangement under which the attorney’s entitlement to professional fees — or to an agreed uplift on ordinary fees — depends on the client achieving “success” as defined in the agreement. The arrangement is governed by the Contingency Fees Act 66 of 1997 and must be reduced to writing in the prescribed form before any work is performed under it.

“No win, no fee” does not mean litigation is free in every outcome. Disbursements, expert fees, counsel’s fees, sheriff’s charges and an adverse costs order all require separate treatment in the written agreement. A compliant statutory arrangement should also be distinguished from four commonly confused alternatives:

• An informal promise of a percentage of any recovery, which is unenforceable without a compliant written agreement.
• A common-law percentage fee, which the Contingency Fees Act was designed to replace and regulate.
• Litigation funding provided by a third-party funder, which is a separate commercial arrangement governed by different rules.
• A standard hourly, fixed-fee or fee-on-settlement mandate, where the client always pays for the work performed regardless of outcome.

The arrangement must concern legal proceedings, and the attorney should first form the required professional opinion that the matter has reasonable prospects of success before offering the terms. A “no win, no fee” advertisement that is not backed by a properly signed and prescribed agreement does not, on its own, create enforceable fee terms.

The Two Fee Models Allowed by Section 2

Section 2 of the Contingency Fees Act permits two distinct fee models. They are not interchangeable, and clients should know which one the proposed agreement uses before they sign.

Statutory model	If the client is unsuccessful	If the client is successful	Key point to explain
Section 2(1)(a) — no-fee model	The legal practitioner receives no professional fee for services covered by the agreement.	The agreement governs the fee payable after success, subject to both statutory caps.	Expenses and adverse costs are separate from the attorney’s professional fee and must be addressed expressly in the agreement.
Section 2(1)(b) — higher-success-fee model	The client may remain liable for the attorney’s normal fee, depending on the wording of the compliant agreement.	The attorney may charge an agreed fee higher than the normal fee, within both statutory limits.	This is not necessarily “no win, no fee”; the unsuccessful-outcome wording must be read carefully.

“Success” must be defined precisely in the agreement. It can mean a judgment, a settlement, a partial recovery, a non-monetary order or another stated result, and the choice affects how the fee is calculated. Clients should not assume that every contingency mandate uses the same model or the same definition of success.

How the Success-Fee Caps Work

The Contingency Fees Act applies two limits to the uplifted fee, and they work together — the attorney may not choose between them. The fee must remain within whichever ceiling produces the lower figure on the facts of the matter:

• Twice-the-normal-fee cap: the uplifted success fee may not exceed twice the attorney’s normal fee for the same work.
• 25% recovery cap: in a claim sounding in money, the success fee may not exceed 25% of the amount awarded to or obtained by the client, excluding costs.

The 25% figure is a ceiling, not an automatic fee and not necessarily the amount the client will pay. The “normal fee” must be disclosed and capable of calculation so the client can test the proposed uplift, and party-and-party costs recovered from the opponent must not be casually described as part of the client’s damages when the 25% figure is being calculated.

Illustrative worked example (not a quote)

The figures below are illustrative only and do not represent a fee quotation from Burger Huyser Attorneys or any other firm.

Item	Amount
Amount recovered by the client (excluding costs)	R400,000
Illustrative normal attorney fee	R70,000
Twice-normal-fee ceiling	R140,000
25% recovery ceiling (excluding costs)	R100,000
Maximum success fee on these assumptions	R100,000 (the lower ceiling)

VAT, disbursements, costs recovered under an order or settlement, and any amounts the Act excludes from the calculation must be dealt with separately and verified for the specific matter. The final fee calculation is governed by the agreement, the applicable law and the actual work performed.

What a Valid Written Agreement Should Contain

A compliant contingency-fee agreement is more than a cover page and a percentage figure. The following checklist captures the matters a client should be able to find in the document before signing. Each item should be compared against the current prescribed form and the consolidated Contingency Fees Act before publication — older templates may not reflect the latest drafting.

1. Identify the legal practitioner, the client and the proceedings covered by the mandate.
2. Record the attorney’s professional opinion that there are reasonable prospects of success, without guaranteeing an outcome.
3. Define what counts as success and explain the circumstances in which the client may owe no fee, a normal fee or a higher success fee.
4. State the normal fee, the agreed success fee or the calculation method, and explain how both statutory caps will be applied.
5. Explain disbursements and identify who funds advocates, experts, medical reports, sheriff’s fees and other third-party expenses.
6. Address adverse costs risk, including the possibility that the client may have to pay an opponent’s legal costs on an unsuccessful outcome.
7. Explain how settlements will be handled and what information the client must receive before accepting an offer.
8. Include the prescribed cooling-off and termination provisions, and explain the consequences if the client changes attorneys.
9. Ensure the agreement is signed in the prescribed form and that the client receives a copy.

“No Win, No Fee” Does Not Remove Every Financial Risk

A compliant agreement addresses each of the following risks in plain language. Where the agreement is silent, the client carries the uncertainty.

Which Matters May Be Suitable for Contingency Fees?

Suitability depends on the provable merits, causation, recoverable loss, the likely defendant’s ability to satisfy an award, evidential complexity, expected duration and projected disbursements. Potentially suitable civil claims may include damages litigation and other proceedings seeking measurable relief, but no practice area or matter should be presented as automatically eligible. Each matter must be assessed on its own facts.

An attorney may decline contingency terms even where a client appears to have a valid claim. A refusal to fund on contingency is not necessarily a view that the claim has no merit — it may reflect the disbursement profile, the opponent’s ability to pay, or the firm’s case load. Burger Huyser Attorneys’ general and commercial litigation practice represents plaintiffs and defendants in civil suits, but the availability and terms of any contingency arrangement are always confirmed after an individual merits and costs assessment.

How to Compare a Contingency Agreement Before Signing

Clients are entitled to ask each of the following questions in writing and to receive a clear answer before signing.

• Which section 2 model applies, and what happens to professional fees if the matter is unsuccessful?
• What is the normal fee, the proposed uplift and the worked calculation under both statutory ceilings?
• Which expenses remain payable regardless of outcome, and is written approval needed before any major disbursement?
• How will any party-and-party costs recovered from the opponent affect the final account?
• What counts as success, especially after a partial settlement or a non-monetary order?
• Who makes settlement decisions, and is the client’s decision-making authority preserved after receiving legal advice?
• What happens during the cooling-off period, on cancellation or if another attorney takes over the file?

Insist on a signed copy of the agreement and an itemised final statement rather than relying on a verbal percentage.

Settlements, Statements and the Client’s Right to Understand the Calculation

Settlement advice should identify the gross offer, the likely deductions, the costs consequences, the disbursements and an estimated net amount before the client decides. The attorney advises, but the client gives settlement instructions; an attorney may not settle without authority. Section 4 of the Contingency Fees Act, read with the rules made under section 6, also requires particular affidavits and settlement documents to be lodged once a settlement offer is made, and the precise current filing requirements should be verified against the consolidated Act and the rules in force at the time.

A client should expect the final account to set out, at minimum:

• The amount recovered.
• The normal fee and the uplift calculation.
• The applicable cap that actually limited the fee.
• Recovered costs.
• Disbursements.
• VAT, where applicable.
• The net payment to the client.

Warning Signs of a Non-Compliant or Unfair Arrangement

Several features should give a prospective client pause. None of them is conclusive on its own, but together they suggest the agreement has not been drafted with the Act in mind.

• A verbal “percentage of winnings” arrangement with no prescribed written agreement.
• An automatic 25% charge with no normal-fee calculation or comparison to the twice-normal-fee ceiling.
• Vague or absent wording about expenses, adverse costs, termination or partial success.
• Pressure to sign without time to read the document or obtain an explanation.
• A fee calculated on amounts that the legislation excludes, or unexplained deductions from settlement proceeds.
• Guarantees of success, or promises that the client can never owe anything under any circumstances.

Invalidity and fee recovery can be legally complex. A client disputing an agreement should obtain independent advice rather than simply withholding payment.

Choosing a South African Litigation Attorney for a Contingency Matter

The statutory framework is national, so subject-matter experience and court jurisdiction matter more than a generic claim of being a “contingency lawyer.” When comparing firms, look for:

• Relevant civil-litigation experience, a disciplined merits assessment and a willingness to discuss weaknesses as clearly as strengths.
• Transparent written explanations of fees, prospects, disbursements and adverse-cost exposure over headline “no win, no fee” advertising.
• Clear answers about who will manage the file, how often progress will be reported, and when the merits or funding arrangement will be reassessed.
• Confirmation that counsel, experts or other specialists will be instructed only with the client’s approval and that their costs will be funded in a way the agreement clearly describes.

Burger Huyser Attorneys’ general and commercial litigation team is built around the kind of disciplined, plain-spoken assessment these criteria describe — clients are given honest answers about prospects and costs, reflected in the firm’s 4.8/5 average from 250+ Google reviews and its long-standing multi-specialist reputation across Gauteng.

Frequently Asked Questions

What percentage can a lawyer take under a contingency-fee agreement in South Africa?

The 25% figure is a statutory ceiling in claims sounding in money, not an automatic entitlement. The success fee must also remain within the separate twice-the-normal-fee limit, so the lower applicable ceiling controls. Costs are excluded from the 25% calculation.

Does “no win, no fee” mean I pay nothing if I lose?

Not necessarily. One statutory model allows no professional fee after an unsuccessful outcome, while another may provide for the normal fee if the matter is unsuccessful. Disbursements and an opponent’s costs can also remain separate risks. The written agreement should state each consequence plainly.

Can any South African attorney offer contingency fees?

An attorney may offer a contingency arrangement only within the Contingency Fees Act 66 of 1997 and after the required assessment of reasonable prospects. A firm is not obliged to accept every matter on contingency terms, even where it is willing to act under another fee structure.

Is 25% added on top of the attorney’s ordinary fees?

The cap should not be presented as an automatic 25% surcharge. A compliant calculation starts with the normal fee, applies the agreed success uplift, and then tests the result against both statutory ceilings, with costs and disbursements accounted for separately.

What should I take to a first consultation about a contingency claim?

Take a dated chronology, contracts or correspondence, photographs, reports, invoices, proof of financial loss, witness details, and any court or settlement documents. These materials help the attorney assess merits, causation, value, jurisdiction, evidence, likely expenses and whether contingency terms are appropriate.

Can I cancel a contingency-fee agreement after signing it?

The statutory framework and the prescribed agreement include cooling-off and termination mechanisms, but the timing and the financial consequences depend on the agreement and the work already performed. Obtain a written explanation before cancelling or transferring the file.

Need a contingency arrangement assessed in plain language? Burger Huyser Attorneys’ general and commercial litigation team can review the prospects, costs and risks of your matter and explain whether contingency terms are legally and practically suitable. Contact the Linden head office at 49 First Avenue, Linden, Randburg, on 011 888 0246 or 061 516 6878 to arrange a consultation. The firm is known for personalised service and honest conversations about costs and prospects — a standard reflected in its 4.8/5 average from 250+ Google reviews. No contingency arrangement or outcome is guaranteed, and proposed terms will depend on an individual merits, risk and costs assessment.